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

  • Dr Munawwar Kartio
  • Prof Muhammad Ishaque Bajoi
  • Prof Dr Ambreen Zaib Khaskelly
Keywords: Privatization; MCB Bank Limited; Non Performing Loans; CAR; Deposits; Assets; Profitability.


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.

Pakistan’s 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.


Download data is not yet available.

Author Biographies

Prof Muhammad Ishaque Bajoi

Ph D Scholar Department of Economics, University of Sindh Jamshoro

Prof Dr Ambreen Zaib Khaskelly


Chairperson University of Sindh, Department of Economics University of Sindh Jamshoro


1. Ayub, Muhammad (1996), ‘Appraisal of reforms introduced and need and scope for further reforms in Finacial Sector in Pakistan’, Pakistan economic and social review 37(1) pp 27-39
2. Berger Allen N., Mester Loretta (1997), ‘inside the black box: what explains differences in the efficiencies of financial institution? Journal of Banking and Finance (21)7 pp 35-38
3. Berger, A.N., Hancock, D. Humphery, D.B. (1993), ‘Bank efficiency derived from the profit function, Journal of Ba finance pp-17.317-347
4. Berg, S.A., (1993), ‘Bank efficiency in Nordic countries ‘, Journal of Banking and finance (17) 2-3, pp 39-45
5. Dario Focarelli, (1995), ‘Are Mergers Beneficial to Consumers? Evidence from the market for bank Deposits’, Bank of Italy, discussion paper 448, pp 25-36
6. Edward Altzman (1968),’Financial Ratios, Discriminate Analysis and prediction of Corporate Bankruptcies’, Journal of Finance-1968 pp 21-28
7. Kalim Hyder, (1991), Financial sector Reforms & Monetary Policy’, Journal of Islamic Banking Vol. 8, pp 885-895
8. K. Satyanarayana Dr.(1996), ‘What Ails the Public Sector Banks in India-Need for strategic thrust’ Journal of Indian Institute pp 4-9
9. Mangi Naveen A., ( 1996 ) ‘Banking and Financial Sector Reforms after implementation’, Pak. & Gulf Economist, Vol.15 pp 521-543
10. Marakoon Bandra, (2002) ‘Implications of financial sector reforms in Sri Lanka’, pp 185-197
11. Pervaz Hasan, (1998), ‘Pakistan Economy at the crossroads past policies and present imperatives’, pp 51-84
12. Riaz Riazudin (2001), Pakistan: Financial Sector Assessment 1990-2000, pp 1-89
13. R. Tod Smith, (1998), ‘Banking Competition and Macroeconomic Performance’, Money Credit and Banking, Vol.26, pp 793-798
14. Salman Ahmed, ( 2003 ), Performance of Commercial Banks in Pakistan’, Lahore School of Economics, pp 1-15
15. Sengupta, Arjun, ( 1995 ), ‘Financial sector & Economic Reforms’, Economic and Political Weekly Vol.XXX pp 412-435
16. S. Rajagopal, ( 1996 ), ‘Bank Risk Management A Risk Pricing Modle’, Oxford University Press, Oxford, pp 10-14
17. Sultan Ahmed, ( 1998 ), ‘Banking reforms imperative’, Business, Daily Dawn
18. Tahir Andrabi & Andera Ripa Di Meana, (1994), ‘Banking Regulations and Debt Overhang’, Money Credit and Banking, Vol. 26, part- No. 3, pp 460-475
19. Taseer Hadi Khalid and Company, (2000), ‘Study on Banks operating in Pakistan’, Banking survey, pp 13-72
20. W. S. Saraf, (1998), ‘Banking Technology: Agenda Ahead’, Oxford University Press, Oxford pp 153-155
How to Cite
Kartio, D. M., Ishaque Bajoi, P. M., & Zaib Khaskelly, P. D. A. (2017). Privatization of Banking Sector in Pakistan- A Case Study of MCB Bank Limited. INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY, 12(1), 3159-3166.