Privatization of Banking Sector in Pakistan- A Case Study of MCB Bank Limited

Abstract

This research study aimed at to explore the performance and efficiency of selected sample bank after its privatization. Privatization is the process to sale and transfers the assets of public sector entities to private sector to boost the laissez fair economy in line with international trends in the wake of failure of socialism and communism. Pakistans banking sector was performing very poor after the nationalization of banks in 1974 and witnessed financial indiscipline due to political interference in day to day activities particularly in hiring and lending which badly affected the quality of service on one hand and accumulation of bad debts on other. Therefore need was felt to privatize the state owned organizations with main objective to restrict the role government interference so that performance of banking industry of the country could be improved. Prior researchers worked a lot to identify the positive and negative effects of privatization on the performance of newly privatized firms globally. This research has been carried out to evaluate and assess the performance of MCB (Formerly Muslim Commercial Bank Limited) after privatization. The research revealed that bank has performed very well in terms of growth, profitability, liquidity and solvency. Financial ratios have been used to evaluate the performance and efficiency and were represented by using graphs. Software SPSS (statistical package for social science) was also used to gauge and find descriptive & graphical analysis. It was concluded that bank has shown tremendous growth in building deposits base, generating profits and ensuring long term solvency.