TITLE

PRIVATIZATION OF BANKS IN PAKISTAN: A CASE STUDY OF ALLIED BANK

AUTHOR(S)
Shah, Asif Ali; Jhatial, Ashique Ali; Ghumro, Ikhtiar Ali; Shah, Naimatullah
PUB. DATE
May 2012
SOURCE
Interdisciplinary Journal of Contemporary Research in Business;May2012, Vol. 4 Issue 1, p627
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The Pakistani banks had created huge percentage of NPLs, at this stage banking sector suffered under the heavy burden of external debits, accounts were misappropriated by the end of 1980s, it was evident that the pervasive monetary and credit policies allowed over the years and had given way to the repressed financial system, affected adversely the growth and efficiency of the financial sector. The government ownership of commercial banks resulted in political intervention into credit allocation and loan recovery decisions besides other institutional inefficiencies. As a result, infected loans increased sharply, financial institutions suffered losses, and quality of services plummeted. The privatization process has been, however, slow for the reason that the governments concentrated more on some financial institutes especially banks, services and transportation. The main objectives of the study were to review the privatization process in historical perspective of Pakistan. To compare the various measures of performance such as (Profitability, Efficiency, Investment, Employment and Assets) of Allied Bank before after privatization period. To suggest policy measures. The study was analysed on the hypotheses, profitability of Allied bank has been changed after privatization, Allied Bank efficiency of Privatized banks has been changed. The deposits, pre-tax profit and investment of Allied bank and Muslim Commercial bank changed after privatization. The study applied the methodology, the comparative analysis and efficiency levels were measured by using nonparametric statistical tests and regression analysis. Means were compared by using t-test. A time series model is also used to determine the sequential trend of the components. The results show that Allied Bank Limited showed a slow progress as compared to the other Banks throughout the privatization period. The reasons explored are the transfer of the bank from pre-nationalization to the nationalization without taking in account of the capital dividends on certain vivid policy measures. The models applied on the bank conclude that The plot of the model shows that the deposits and investment declined before privatization whereas less or more the pre-tax profit, income and expenditure remained persistently in growth throughout the pre-privatization period. On the contrary, in the post-privatization era, the deposits and investment jerked to high level of growth but the expenditure and income remained parallel with the pre-privatization period.
ACCESSION #
77472227

 

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