DETERMINANTS OF COMMERCIAL BANKS DEPOSIT EVIDENCED FROM PRIVATE COMMERCIAL BANKS IN ETHIOPIA

Abstract

This paper is an effort to reveal the insight dynamics that determine Private commercial banks deposit with reference to Ethiopian commercial banks. In order to achieve these objectives the study adopts quantitative data from National Bank of Ethiopia (NBE), Ministry of Finance and Economic Cooperation (MOFEC),Central statistical Authority(CSA), World Bank website which incorporates the period from 2000-2017.The Target population was selected private commercial banks that engage in commercial activities and registered by National Bank of Ethiopia to act. Consequently, seven banks, out of sixteen private commercial banks in existence at June 2017, have purposively been selected for the finding. Different diagnostic test were performed to know whether the model is valid or not. All the tests were valid and eventually regression analysis was performed using STATA 13 software statistical package. The result from regression analysis showed that Deposit Interest rate was significantly and negatively correlated with total deposit, Money supply, Real GDP, Individual foreign Remittance, where significantly and positively correlated with the Total deposit, and Inflation rate and exchange rate was insignificantly and positively correlated with the Banks Total deposit Finally result from the study The researcher recommended that the selected private commercial Banks should have to work on Individual foreign remittance, Economic growth (RGDP) Money supply, to increase their total deposit.