The document discusses policy considerations for bank privatization based on country experiences. It provides background on Pakistan's banking sector nationalization in the 1970s and rationale for privatization in the 1990s, including reducing fiscal deficit and increasing efficiency. Steps taken to prepare banks for privatization included restructuring, recapitalization and transferring non-performing loans. Several banks were privatized through competitive bidding and IPOs, generating over $710 million. Case studies of Muslim Commercial Bank and Allied Bank highlight their financial indicators and impact of privatization.
Nationalization of financial sector pakistan 1974Umar Farooq Sahi
An analytical presentation on 1974 nationalization of banks and financial instituitions in Pakistan. Draws on primary sources: government and non-governmental sources, including, old economic surveys, books and research papers on the topic. Information about this topic is scarce and an open field for financial-analytical research.
For more explanation of slides, contact at: <i>
Done by:
Umer Toor, Hassan Mohi-ud-Din, Aqeel Rana, Waqas Khalique, Sehrish Asghar
The document discusses the history and reforms of the banking industry in India. It describes the industry's evolution through five phases: evolutionary, foundation, expansion, consolidation, and reformatory. Major reforms since the 1990s included liberalizing interest rates, reducing statutory preemptions like CRR and SLR, increasing competition through private banks and foreign banks, and improving regulation and supervision. The reforms have led to improved access to credit, more independent monetary policymaking, and greater operational freedom for banks.
This document provides an overview of the impact of banking sector reforms in India. It discusses the necessity for reforms in the 1990s due to economic crisis. It outlines the key recommendations of the 1991 and 1998 Narasimhan Committees, which served as the basis for reforms. The reforms focused on reducing reserve requirements, introducing prudential norms, capital adequacy norms, interest rate deregulation, and allowing private sector banks. The impacts of the reforms included improved productivity, profitability and asset quality of banks as well as enhanced customer services and corporate lending. Overall, the reforms helped make the Indian banking sector more robust and competitive.
This document discusses banking sector reforms in India. It provides background on banking sector reforms initiated after 1991, including recommendations from the Narasimham Committee reports. The objectives of the study are outlined as having an overview of post-1991 reforms, evaluating the overall banking system scenario in India, and studying banking sector growth and performance. The structure of the Indian banking system is described, including the roles of public and private sector banks, regional rural banks, cooperative banks, and the Reserve Bank of India as the central bank and monetary authority.
This document provides an overview of the banking reforms and reorganization that have occurred in India since the beginning of economic liberalization in the 1990s. It discusses how interest rates have been deregulated, competition has increased from new private banks and foreign banks entering the market, and non-performing assets have remained high, particularly for public sector banks. While reforms have improved the banking system, issues still remain regarding the performance of public sector banks and their high levels of non-performing loans.
The document summarizes the key findings and recommendations of the Verma Committee, which was appointed in 1999 to examine problems facing weak public sector banks in India and propose restructuring solutions. The committee identified 8 banks with losses exceeding net worth and 3 banks with negative operating profits for 3 years. It recommended a two-stage restructuring process involving operational and organizational changes first, followed by privatization or merger options. Staff cost reductions, branch rationalization and maintaining adequate capital levels were also suggested.
The banking sector of Pakistan began with the establishment of the State Bank of Pakistan on July 1, 1948 as the country's first central bank. Key events included the nationalization of banks in 1974 and the granting of autonomy to the State Bank in 1994-1997. Today there are several types of banks operating in Pakistan, including public sector banks, specialized banks, private banks, Islamic banks, foreign banks, microfinance banks, and development finance institutions. The State Bank of Pakistan performs traditional central banking functions like monetary policy as well as developmental roles to promote financial inclusion and priority sectors.
Financial liberalization, Reforms carried out in India and their impact on fi...Simrankaur1022
Research paper - Introduction to financial liberalization, financial repression, benefits of financial liberalization, financial liberalization in India, MAJOR FINANCIAL SECTOR REFORMS CARRIED OUT IN INDIA SINCE 1991, OVERALL IMPACT OF THE REFORMS ON FINANCIAL SECTOR OF
INDIA SINCE 1991.
Nationalization of financial sector pakistan 1974Umar Farooq Sahi
An analytical presentation on 1974 nationalization of banks and financial instituitions in Pakistan. Draws on primary sources: government and non-governmental sources, including, old economic surveys, books and research papers on the topic. Information about this topic is scarce and an open field for financial-analytical research.
For more explanation of slides, contact at: <i>
Done by:
Umer Toor, Hassan Mohi-ud-Din, Aqeel Rana, Waqas Khalique, Sehrish Asghar
The document discusses the history and reforms of the banking industry in India. It describes the industry's evolution through five phases: evolutionary, foundation, expansion, consolidation, and reformatory. Major reforms since the 1990s included liberalizing interest rates, reducing statutory preemptions like CRR and SLR, increasing competition through private banks and foreign banks, and improving regulation and supervision. The reforms have led to improved access to credit, more independent monetary policymaking, and greater operational freedom for banks.
This document provides an overview of the impact of banking sector reforms in India. It discusses the necessity for reforms in the 1990s due to economic crisis. It outlines the key recommendations of the 1991 and 1998 Narasimhan Committees, which served as the basis for reforms. The reforms focused on reducing reserve requirements, introducing prudential norms, capital adequacy norms, interest rate deregulation, and allowing private sector banks. The impacts of the reforms included improved productivity, profitability and asset quality of banks as well as enhanced customer services and corporate lending. Overall, the reforms helped make the Indian banking sector more robust and competitive.
This document discusses banking sector reforms in India. It provides background on banking sector reforms initiated after 1991, including recommendations from the Narasimham Committee reports. The objectives of the study are outlined as having an overview of post-1991 reforms, evaluating the overall banking system scenario in India, and studying banking sector growth and performance. The structure of the Indian banking system is described, including the roles of public and private sector banks, regional rural banks, cooperative banks, and the Reserve Bank of India as the central bank and monetary authority.
This document provides an overview of the banking reforms and reorganization that have occurred in India since the beginning of economic liberalization in the 1990s. It discusses how interest rates have been deregulated, competition has increased from new private banks and foreign banks entering the market, and non-performing assets have remained high, particularly for public sector banks. While reforms have improved the banking system, issues still remain regarding the performance of public sector banks and their high levels of non-performing loans.
The document summarizes the key findings and recommendations of the Verma Committee, which was appointed in 1999 to examine problems facing weak public sector banks in India and propose restructuring solutions. The committee identified 8 banks with losses exceeding net worth and 3 banks with negative operating profits for 3 years. It recommended a two-stage restructuring process involving operational and organizational changes first, followed by privatization or merger options. Staff cost reductions, branch rationalization and maintaining adequate capital levels were also suggested.
The banking sector of Pakistan began with the establishment of the State Bank of Pakistan on July 1, 1948 as the country's first central bank. Key events included the nationalization of banks in 1974 and the granting of autonomy to the State Bank in 1994-1997. Today there are several types of banks operating in Pakistan, including public sector banks, specialized banks, private banks, Islamic banks, foreign banks, microfinance banks, and development finance institutions. The State Bank of Pakistan performs traditional central banking functions like monetary policy as well as developmental roles to promote financial inclusion and priority sectors.
Financial liberalization, Reforms carried out in India and their impact on fi...Simrankaur1022
Research paper - Introduction to financial liberalization, financial repression, benefits of financial liberalization, financial liberalization in India, MAJOR FINANCIAL SECTOR REFORMS CARRIED OUT IN INDIA SINCE 1991, OVERALL IMPACT OF THE REFORMS ON FINANCIAL SECTOR OF
INDIA SINCE 1991.
The document discusses the Narasimham Committee reports from 1991 and 1998 that were pivotal in reforming India's financial system. The 1991 report recommended reducing CRR and SLR ratios, phasing out directed credit, interest rate deregulation, bank restructuring, and increasing autonomy. The 1998 report focused on strengthening banks through mergers, raising capital adequacy ratios, reducing NPAs, and reviewing banking laws. The recommendations helped transform India's banking system and supported the country's economic growth.
BANKING SECTOR REFORMS IN MYANMAR COLLECTION
https://www.mmbiztoday.com/articles/inside-banking-reform-myanmar
Inside: Banking Reform in Myanmar
https://www.reuters.com/article/us-myanmar-banking-exclusive/exclusive-tussle-over-myanmar-bank-reform-puts-spotlight-on-debt-pile-idUSKBN1DM25W
Exclusive: Tussle over Myanmar bank reform puts spotlight on debt pile
https://www.aseanbriefing.com/news/2018/03/21/banking-sector-reforms-myanmar.html
Banking Sector Reforms in Myanmar
https://carnegieendowment.org/2014/06/05/banking-on-myanmar-strategy-for-financial-sector-reform-pub-55813
Banking on Myanmar: A Strategy for Financial Sector Reform
https://www.mmtimes.com/news/regulatory-roadmap-needed-banking-sector-reform.html
Regulatory roadmap needed for banking sector reform
https://muse.jhu.edu/article/550663/pdf
Banking and Financial Regulation and Reform in Myanmar
http://www.myanmarmatters.com/banking-reforms-in-myanmar/
BANKING REFORMS IN MYANMAR
http://www.mizzima.com/business-opinion/extensive-reforms-will-enable-myanmars-banking-sector-grow-eightfold-report
Extensive reforms will enable Myanmar's banking sector to grow eightfold: report
https://www.bloomberg.com/news/articles/2017-03-08/myanmar-to-vet-state-banks-to-protect-asia-s-top-growing-economy
Myanmar Wants to Modernize Its Banking System
http://www.nationmultimedia.com/business/Reform-of-the-banking-system-tops-Myanmars-agenda-30202140.html
Reform of the banking system tops Myanmar's agenda
http://www.milkeninstitute.org/publications/view/875
The Banking Sector in Myanmar: An Assessment of Recent Progress
http://assets1c.milkeninstitute.org/assets/Publication/Viewpoint/PDF/083117-MyanmarBanking.pdf
https://burmese.voanews.com/a/burma-forum-financial-reform-and-nld/4197608.html?ltflags=mailer
NLD အစိုးရ ဘဏ္လုပ္ငန္းျပဳျပင္ေျပာင္းလဲမႈ
Regional Rural Banks were created to serve rural areas of India with basic banking and financial services and provide credit facilities to the agriculture and rural sectors. They are local level banking organizations operating in different Indian states, with equity divided between the Government of India, state governments, and sponsor banks. The first Regional Rural Bank called Prathama Bank was established in Moradabad in 1975 with Syndicate Bank as the lead sponsor bank.
The document discusses banking sector reforms in India prior to 1991. It notes that prior to reforms, the banking sector was characterized by administered interest rates, quantitative restrictions on lending, high reserve requirements, and stringent regulations. The first Narasimham Committee was set up in 1991 to recommend measures to strengthen the banking system. The first phase of reforms included reducing statutory liquidity and cash reserve ratios, deregulating interest rates, setting up debt recovery tribunals, and introducing prudential norms on income recognition and asset classification. Non-performing assets were identified as a key issue, with guidelines provided on classifying assets as standard, sub-standard, doubtful or loss.
This document discusses the performance of banks in India. It provides an overview of key metrics used to evaluate banks, including the CAMELS framework which assesses capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. The document then examines objectives and growth trends for scheduled commercial banks in India, including financial inclusion, deposits, investments, advances, capital adequacy, non-performing assets, financial intermediation, and returns. Challenges for the banking sector are also reviewed. Data charts are provided on various banking metrics and statistics.
an analysis about the Indian banking system and the analysis of two major banking sector reforms; Narasimham committee (1 and 2) on banking sector reforms
NABARD is India's apex development bank that focuses on rural development. It provides refinancing support and develops rural infrastructure to promote agriculture and rural development. NABARD also regulates cooperative banks and rural banks. It works to expand financial inclusion through programs like self-help groups and credit cards for farmers. While NABARD has significantly contributed to rural development, it faces challenges in adequately financing some regions and maintaining its link to the central bank.
Regional Rural Banks (RRBs) are government-owned banks that operate regionally in India to promote financial inclusion. RRBs are regulated by NABARD and have the central government, state government, and sponsor banks (public sector banks like SBI) as shareholders. They provide banking services in rural areas, offer loans to rural livelihoods and small businesses at lower interest rates, encourage savings, and implement various government schemes. Financial inclusion aims to provide all individuals access to banking and financial services without discrimination through initiatives like expanding access points, financial literacy programs, and tailored financial products. RRBs and the increased digitization of financial transactions through technologies like UPI and USSD help advance India's financial inclusion objectives.
Pj nayak committee report a summary presentationAnshu Sindhu
This document summarizes the recommendations of the P.J. Nayak Committee on governance reforms for public sector banks in India. Some key points:
- Public sector banks are in a fragile financial position due to high levels of stressed assets and need for capital. Governance issues like weak boards and government interference have contributed to underperformance.
- A new Banking Investment Company (BIC) is proposed to hold government stakes in banks and empower bank boards, removing direct government control. BIC would transfer its holdings to fully independent bank boards over three phases.
- Selection of board members and top management should be handled by a new independent body instead of the current arbitrary government process, to introduce more professionalism
India prospers if rural areas prosper. Through its credit and development initiatives, NABARD ensures that India's food needs are met season after season and year after year by focusing on rural development. NABARD provides refinancing, direct lending, and development support to promote sustainable agriculture and rural development. It works to strengthen rural financial institutions and ensure access to credit for farmers and rural communities.
The Reserve Bank of India (RBI) is India's central banking institution established in 1935. It controls monetary policy and ensures price stability in India. RBI was initially owned privately but was nationalized in 1949. RBI plays an important role in the development strategy of the Indian government and oversees financial inclusion initiatives. It is governed by a 21-member Central Board of Directors including the Governor, Deputy Governors, and government and regional representatives.
Monetary Policy and Banking Reforms of India (BUSINESS ENVIRONMENT)Priyanka Saluja
This document provides an overview of monetary and banking reforms in India. It discusses the role and objectives of monetary policy set by the Reserve Bank of India, including various instruments and factors that influence policy. It also outlines the history and phases of development of the banking sector in India, from the early evolutionary phase to the recent consolidations phase. Major reforms and recommendations, like nationalization of banks and the Narsimhan Committee, are also mentioned.
NABARD was established in 1982 to promote rural prosperity in India. It replaced existing agricultural credit and rural development institutions. NABARD operates nationwide with regional and district offices. Its mission is to support sustainable agriculture and integrated rural development through credit and other services. NABARD provides refinancing to banks and cooperatives, promotes rural policies, and works to enhance financial inclusion in rural areas through programs like Kisan Credit Cards, self-help groups, and watershed development.
EXIM bank, NABARD and Regional Rural Banks (RRBs)Madhumitha Kumar
The document discusses four major Indian financial institutions - EXIM Bank of India, NABARD, RRBs. EXIM Bank provides export financing and promotes India's international trade. NABARD is the apex development bank for agriculture and rural development, facilitating credit flow. RRBs were established to meet rural credit needs and reduce regional imbalances by granting loans to small farmers, entrepreneurs, and increasing rural employment.
The document discusses the recommendations of the Narasimhan Committee on financial sector reforms in India in the 1990s. It summarizes the key reforms such as liberalizing private sector participation in banking, strengthening bank regulation, developing the bond and money markets, reforming insurance and capital markets, and establishing independent regulators like SEBI and IRDA. The reforms aimed to develop an efficient, competitive and stable financial system to effectively allocate resources and support growth.
The document discusses the history and functions of rural credit in India. It notes that rural credit is aimed at impacting rural populations through lending programs and lines of credit for farmers and agricultural work. In India, rural credit originated with the creation of a network of rural credit cooperatives in the 1950s to channel credit between the state and rural communes. In the late 1970s, as economic reforms enabled private enterprise, rural credit cooperatives began functioning as grassroots banks providing credit and savings services to rural communities. Today, rural credit supports individuals, businesses, and development projects that benefit rural areas through loans, mortgages, and other financing adapted to farmers' agricultural cycles.
NABARD was established in 1982 to facilitate credit flow for rural development in India. It replaced the Agricultural Credit Department and Rural Planning and Credit Cell of the Reserve Bank of India. NABARD's vision is to empower rural poor through improved access to formal credit, and its mission is to promote sustainable agriculture and rural development through credit support, institution building, and other initiatives. NABARD's key functions include credit provision and refinance, developmental and promotional activities, and supervision of rural banks. It has contributed to the growth of the dairy, fisheries, and storage industries in India.
The document summarizes the recommendations of a committee chaired by Dr. Raghuram Rajan on developing a composite development index to determine the allocation of central government funds to Indian states. The committee proposed allocating funds based on a state's development needs (as measured by an underdevelopment index) and performance (improvement in the index over time). It recommended dividing states into three categories - least, less and relatively developed - and providing extra funding to the least developed states. The report was praised by states set to receive more funding but criticized by states that would receive less.
Report on Role of RBI in agriculture development in IndiaVijay Raskar
The document discusses the role of the Reserve Bank of India (RBI) in agricultural development in India. It outlines the functions and activities of RBI, including providing credit and refinancing support to banks for lending to the agricultural sector. It also discusses RBI's role in promoting agricultural marketing and integrated development of agriculture through commodity futures markets and warehouse receipt financing. Overall, the document examines how RBI facilitates financing and development of Indian agriculture through its monetary and developmental functions.
The document reviews money market reforms in India and evaluates their current status. It discusses the history of money market reforms since 1991, including reductions to reserve requirements and interest rates as well as the introduction of new instruments. However, it argues that further reforms are still needed to develop debt markets fully and introduce innovative products that better serve small entrepreneurs, farmers, and the poor. Rural access to banking also remains inadequate despite reforms.
The document reviews money market reforms in India and evaluates their adequacy. It discusses the history of money market reforms since 1991, including reductions to statutory reserve requirements, increased banking freedom and private sector participation, and new money market instruments. However, the author argues that further liberalization and innovations are still needed, particularly to better serve small entrepreneurs, artisans, farmers and poor people.
The document discusses the Narasimham Committee reports from 1991 and 1998 that were pivotal in reforming India's financial system. The 1991 report recommended reducing CRR and SLR ratios, phasing out directed credit, interest rate deregulation, bank restructuring, and increasing autonomy. The 1998 report focused on strengthening banks through mergers, raising capital adequacy ratios, reducing NPAs, and reviewing banking laws. The recommendations helped transform India's banking system and supported the country's economic growth.
BANKING SECTOR REFORMS IN MYANMAR COLLECTION
https://www.mmbiztoday.com/articles/inside-banking-reform-myanmar
Inside: Banking Reform in Myanmar
https://www.reuters.com/article/us-myanmar-banking-exclusive/exclusive-tussle-over-myanmar-bank-reform-puts-spotlight-on-debt-pile-idUSKBN1DM25W
Exclusive: Tussle over Myanmar bank reform puts spotlight on debt pile
https://www.aseanbriefing.com/news/2018/03/21/banking-sector-reforms-myanmar.html
Banking Sector Reforms in Myanmar
https://carnegieendowment.org/2014/06/05/banking-on-myanmar-strategy-for-financial-sector-reform-pub-55813
Banking on Myanmar: A Strategy for Financial Sector Reform
https://www.mmtimes.com/news/regulatory-roadmap-needed-banking-sector-reform.html
Regulatory roadmap needed for banking sector reform
https://muse.jhu.edu/article/550663/pdf
Banking and Financial Regulation and Reform in Myanmar
http://www.myanmarmatters.com/banking-reforms-in-myanmar/
BANKING REFORMS IN MYANMAR
http://www.mizzima.com/business-opinion/extensive-reforms-will-enable-myanmars-banking-sector-grow-eightfold-report
Extensive reforms will enable Myanmar's banking sector to grow eightfold: report
https://www.bloomberg.com/news/articles/2017-03-08/myanmar-to-vet-state-banks-to-protect-asia-s-top-growing-economy
Myanmar Wants to Modernize Its Banking System
http://www.nationmultimedia.com/business/Reform-of-the-banking-system-tops-Myanmars-agenda-30202140.html
Reform of the banking system tops Myanmar's agenda
http://www.milkeninstitute.org/publications/view/875
The Banking Sector in Myanmar: An Assessment of Recent Progress
http://assets1c.milkeninstitute.org/assets/Publication/Viewpoint/PDF/083117-MyanmarBanking.pdf
https://burmese.voanews.com/a/burma-forum-financial-reform-and-nld/4197608.html?ltflags=mailer
NLD အစိုးရ ဘဏ္လုပ္ငန္းျပဳျပင္ေျပာင္းလဲမႈ
Regional Rural Banks were created to serve rural areas of India with basic banking and financial services and provide credit facilities to the agriculture and rural sectors. They are local level banking organizations operating in different Indian states, with equity divided between the Government of India, state governments, and sponsor banks. The first Regional Rural Bank called Prathama Bank was established in Moradabad in 1975 with Syndicate Bank as the lead sponsor bank.
The document discusses banking sector reforms in India prior to 1991. It notes that prior to reforms, the banking sector was characterized by administered interest rates, quantitative restrictions on lending, high reserve requirements, and stringent regulations. The first Narasimham Committee was set up in 1991 to recommend measures to strengthen the banking system. The first phase of reforms included reducing statutory liquidity and cash reserve ratios, deregulating interest rates, setting up debt recovery tribunals, and introducing prudential norms on income recognition and asset classification. Non-performing assets were identified as a key issue, with guidelines provided on classifying assets as standard, sub-standard, doubtful or loss.
This document discusses the performance of banks in India. It provides an overview of key metrics used to evaluate banks, including the CAMELS framework which assesses capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. The document then examines objectives and growth trends for scheduled commercial banks in India, including financial inclusion, deposits, investments, advances, capital adequacy, non-performing assets, financial intermediation, and returns. Challenges for the banking sector are also reviewed. Data charts are provided on various banking metrics and statistics.
an analysis about the Indian banking system and the analysis of two major banking sector reforms; Narasimham committee (1 and 2) on banking sector reforms
NABARD is India's apex development bank that focuses on rural development. It provides refinancing support and develops rural infrastructure to promote agriculture and rural development. NABARD also regulates cooperative banks and rural banks. It works to expand financial inclusion through programs like self-help groups and credit cards for farmers. While NABARD has significantly contributed to rural development, it faces challenges in adequately financing some regions and maintaining its link to the central bank.
Regional Rural Banks (RRBs) are government-owned banks that operate regionally in India to promote financial inclusion. RRBs are regulated by NABARD and have the central government, state government, and sponsor banks (public sector banks like SBI) as shareholders. They provide banking services in rural areas, offer loans to rural livelihoods and small businesses at lower interest rates, encourage savings, and implement various government schemes. Financial inclusion aims to provide all individuals access to banking and financial services without discrimination through initiatives like expanding access points, financial literacy programs, and tailored financial products. RRBs and the increased digitization of financial transactions through technologies like UPI and USSD help advance India's financial inclusion objectives.
Pj nayak committee report a summary presentationAnshu Sindhu
This document summarizes the recommendations of the P.J. Nayak Committee on governance reforms for public sector banks in India. Some key points:
- Public sector banks are in a fragile financial position due to high levels of stressed assets and need for capital. Governance issues like weak boards and government interference have contributed to underperformance.
- A new Banking Investment Company (BIC) is proposed to hold government stakes in banks and empower bank boards, removing direct government control. BIC would transfer its holdings to fully independent bank boards over three phases.
- Selection of board members and top management should be handled by a new independent body instead of the current arbitrary government process, to introduce more professionalism
India prospers if rural areas prosper. Through its credit and development initiatives, NABARD ensures that India's food needs are met season after season and year after year by focusing on rural development. NABARD provides refinancing, direct lending, and development support to promote sustainable agriculture and rural development. It works to strengthen rural financial institutions and ensure access to credit for farmers and rural communities.
The Reserve Bank of India (RBI) is India's central banking institution established in 1935. It controls monetary policy and ensures price stability in India. RBI was initially owned privately but was nationalized in 1949. RBI plays an important role in the development strategy of the Indian government and oversees financial inclusion initiatives. It is governed by a 21-member Central Board of Directors including the Governor, Deputy Governors, and government and regional representatives.
Monetary Policy and Banking Reforms of India (BUSINESS ENVIRONMENT)Priyanka Saluja
This document provides an overview of monetary and banking reforms in India. It discusses the role and objectives of monetary policy set by the Reserve Bank of India, including various instruments and factors that influence policy. It also outlines the history and phases of development of the banking sector in India, from the early evolutionary phase to the recent consolidations phase. Major reforms and recommendations, like nationalization of banks and the Narsimhan Committee, are also mentioned.
NABARD was established in 1982 to promote rural prosperity in India. It replaced existing agricultural credit and rural development institutions. NABARD operates nationwide with regional and district offices. Its mission is to support sustainable agriculture and integrated rural development through credit and other services. NABARD provides refinancing to banks and cooperatives, promotes rural policies, and works to enhance financial inclusion in rural areas through programs like Kisan Credit Cards, self-help groups, and watershed development.
EXIM bank, NABARD and Regional Rural Banks (RRBs)Madhumitha Kumar
The document discusses four major Indian financial institutions - EXIM Bank of India, NABARD, RRBs. EXIM Bank provides export financing and promotes India's international trade. NABARD is the apex development bank for agriculture and rural development, facilitating credit flow. RRBs were established to meet rural credit needs and reduce regional imbalances by granting loans to small farmers, entrepreneurs, and increasing rural employment.
The document discusses the recommendations of the Narasimhan Committee on financial sector reforms in India in the 1990s. It summarizes the key reforms such as liberalizing private sector participation in banking, strengthening bank regulation, developing the bond and money markets, reforming insurance and capital markets, and establishing independent regulators like SEBI and IRDA. The reforms aimed to develop an efficient, competitive and stable financial system to effectively allocate resources and support growth.
The document discusses the history and functions of rural credit in India. It notes that rural credit is aimed at impacting rural populations through lending programs and lines of credit for farmers and agricultural work. In India, rural credit originated with the creation of a network of rural credit cooperatives in the 1950s to channel credit between the state and rural communes. In the late 1970s, as economic reforms enabled private enterprise, rural credit cooperatives began functioning as grassroots banks providing credit and savings services to rural communities. Today, rural credit supports individuals, businesses, and development projects that benefit rural areas through loans, mortgages, and other financing adapted to farmers' agricultural cycles.
NABARD was established in 1982 to facilitate credit flow for rural development in India. It replaced the Agricultural Credit Department and Rural Planning and Credit Cell of the Reserve Bank of India. NABARD's vision is to empower rural poor through improved access to formal credit, and its mission is to promote sustainable agriculture and rural development through credit support, institution building, and other initiatives. NABARD's key functions include credit provision and refinance, developmental and promotional activities, and supervision of rural banks. It has contributed to the growth of the dairy, fisheries, and storage industries in India.
The document summarizes the recommendations of a committee chaired by Dr. Raghuram Rajan on developing a composite development index to determine the allocation of central government funds to Indian states. The committee proposed allocating funds based on a state's development needs (as measured by an underdevelopment index) and performance (improvement in the index over time). It recommended dividing states into three categories - least, less and relatively developed - and providing extra funding to the least developed states. The report was praised by states set to receive more funding but criticized by states that would receive less.
Report on Role of RBI in agriculture development in IndiaVijay Raskar
The document discusses the role of the Reserve Bank of India (RBI) in agricultural development in India. It outlines the functions and activities of RBI, including providing credit and refinancing support to banks for lending to the agricultural sector. It also discusses RBI's role in promoting agricultural marketing and integrated development of agriculture through commodity futures markets and warehouse receipt financing. Overall, the document examines how RBI facilitates financing and development of Indian agriculture through its monetary and developmental functions.
The document reviews money market reforms in India and evaluates their current status. It discusses the history of money market reforms since 1991, including reductions to reserve requirements and interest rates as well as the introduction of new instruments. However, it argues that further reforms are still needed to develop debt markets fully and introduce innovative products that better serve small entrepreneurs, farmers, and the poor. Rural access to banking also remains inadequate despite reforms.
The document reviews money market reforms in India and evaluates their adequacy. It discusses the history of money market reforms since 1991, including reductions to statutory reserve requirements, increased banking freedom and private sector participation, and new money market instruments. However, the author argues that further liberalization and innovations are still needed, particularly to better serve small entrepreneurs, artisans, farmers and poor people.
This document is a report submitted by Waseem Ahmed Sandeelo for his Business Communication course at Shah Abdul Latif University Khairpur. It discusses the history and functions of the State Bank of Pakistan. The State Bank was established in 1948 and serves as Pakistan's central bank. It is responsible for monetary policy, banking regulation, and other functions like managing currency and the government's finances. The report provides details on the State Bank's departments, leadership structure including the Governor and Central Board of Directors, and its roles in maintaining price stability, conducting monetary policy, and supporting banking and economic development in Pakistan.
A project report on on the working capital management in karnataka state fina...Babasab Patil
The document discusses the working capital management of the Karnataka State Finance Corporation (KSFC). It provides background on KSFC, stating that it was established in 1915 to provide financial assistance to industrial units in Karnataka. The objectives of the study are to understand KSFC's working capital components and patterns over the period from 2001-2002 to 2006-2007. Data is collected from KSFC's annual reports during this period and analyzed using statistical techniques. The document also outlines KSFC's organizational profile, history, achievements and main activities in providing long term lending and other financial services to support industrial development in Karnataka.
The document provides an overview of banking sector reforms in India. It discusses key recommendations of the Narasimham Committee reports which laid the foundation for banking sector reforms in India, including reducing statutory liquidity ratio and cash reserve ratio, introducing minimum capital adequacy ratios, and adopting uniform accounting practices. The reforms aimed to make the Indian banking system more efficient, competitive, and in line with global standards. It also discusses some challenges in implementing the reforms such as the need to reduce non-performing assets and strengthen weak banks.
The document provides information on the history of banking in Pakistan. It discusses the establishment of commercial banks after independence in 1947 and the nationalization of banks in 1974 under Bhutto. 14 commercial banks were merged into 5 larger banks under the nationalization. The nationalization aimed to more evenly distribute wealth and reduce unhealthy competition. Banks were later privatized beginning in 1991 under Nawaz Sharif to promote free market principles. The document also outlines the role of the State Bank of Pakistan and Pakistan Banking Council in regulating banks and coordinating the banking industry.
This document provides an annual report on banking supervision in Nepal for the fiscal year 2001-2002.
Some key points:
- There were 17 commercial banks in Nepal at the time, with most established in the late 1980s and early 1990s after financial sector liberalization.
- Total deposits in the banking sector grew to Rs. 165,479 million while loans and advances reached Rs. 103,125 million. However, growth slowed in 2001-2002.
- New prudential regulations were issued to strengthen supervision and align with international standards regarding capital adequacy, loan classification, single-obligor limits, and more.
- Reforms were underway to address accumulated losses and non-performing assets at Nepal
Banking sector reforms in india after 1991Bikram Pradhan
The Narasimhan Committee made several recommendations in 1991 to reform India's banking sector as part of broader economic reforms. These included establishing a tiered banking structure, reducing statutory reserves, achieving an 8% capital adequacy ratio, and abolishing branch licensing. In response, the government lowered statutory reserves, implemented prudential norms, capital adequacy requirements, interest rate deregulation, debt recovery laws, and allowed new private banks to increase competition in the sector.
The document provides an internship report on Habib Bank Limited (HBL). It includes an acknowledgement, table of contents, executive summary, and sections on the history of banking in Pakistan and HBL. The executive summary highlights that HBL was the first commercial bank established in Pakistan in 1947 and has grown to over 1,450 branches. It also discusses HBL's mission, vision, values, board of directors, management structure, operations, products/services, and the intern's learnings. SWOT analysis identifies HBL's strengths as its long history, large size and branch network, and high level of public trust in Pakistan.
The document summarizes the evolution of banking in India from 1786 to the present. It discusses 3 phases: (1) Early Indian banks from 1786-1969 prior to reforms, which saw the establishment of colonial banks and slow growth. (2) Nationalization of banks from 1969-1991 for social benefits and rural credit. (3) Post-1991 reforms introducing privatization, competition and new technologies. Key events included the nationalization of SBI in 1955 and major commercial banks in 1969/1980, establishing RRBs in 1975, and liberalization reforms starting in 1992.
The document discusses the privatization of banks in Pakistan. It states that the Bank Nationalization Act of 1974 was amended in 1990 and 1991 to allow for privatization and the establishment of new private banks. The amendments empowered the State Bank of Pakistan to issue licenses for new private banks, which had to be public limited companies offering at least 20% of shares to the public and having a minimum capital of two billion. The privatization was aimed at improving performance, services, deposits, and economic development through increased competition and efficient decision making.
The document is an internship report by Abdul Baseer at the Treasury Cash Unit of the State Bank of Pakistan Banking Services Corporation (SBPBSC) North Nazimabad branch in July 2015. It summarizes the functions of the Treasury Cash Unit, including receiving soiled banknotes, examining them, cancelling defective notes, supplying fresh notes and coins to the public, and maintaining daily records of transactions. It also outlines the unit's hierarchy, vaults, counters, processes for box balances, evening collections, and vault closing procedures.
This document provides an overview of the Indian financial system from 1950 to the present. It discusses the key features and developments during three periods:
1) 1950-1980: The financial system was characterized by government control and ownership of institutions to align with economic planning priorities. Specialized public institutions were established for agriculture, housing, exports, etc.
2) 1980s: More specialized development finance institutions were set up while liberalizing restrictions. The government draft on financial resources increased.
3) Post-1990s: Financial reforms accelerated liberalization and integration into the global economy. Public institutions were privatized, regulations reduced, and new private and foreign players entered the market. The role of capital markets expanded.
Banking sector reforms post economic liberalization periodKumar Nirmal Prasad
The banking sector in India was dominated by public sector banks until reforms began in 1991. A committee was formed under M. Narasimhan to recommend reforms. Key recommendations included establishing a tiered banking structure, reducing statutory reserves, introducing capital adequacy and asset classification standards, and deregulating interest rates. The government then implemented several reforms based on these recommendations, such as lowering reserve requirements, introducing prudential norms, allowing new private banks, and reducing directed lending. This increased competition and efficiency in the banking sector.
The document discusses India's financial sector reforms since the 1990s. It summarizes the key recommendations of the Narasimham Committees in 1991 and 1998 that helped modernize and strengthen India's banking system. The 1991 report recommended establishing a tiered banking structure, reducing statutory reserves, and deregulating interest rates. The 1998 report focused on increasing capital requirements, promoting bank mergers, and reviewing banking laws and ownership. The government implemented many changes based on these reports, including lowering reserve requirements, introducing prudential norms, allowing new private banks, and establishing mechanisms for debt recovery.
The National Commission for Enterprises in the Unorganised Sector (NCEUS) was set up by the Government of India as an advisory body and a watchdog for the informal sector. In the report titled Financing of Enterprises in the Unorganised Sector, the Commission found that the decline in the credit flow to small-scale industries continued unabated. Non-farm unorganised sector enterprises received only 5-6 per cent of the total institutional credit, despite contributing 30 per cent to GDP. The reasons for this included easy accessibility to non-institutional creditors like moneylenders and the high incidence of non-performing assets (which discouraged banks from giving credit). The NCEUS recommended measures to improve access to finance, including revising the priority sector guidelines to focus on lending to sectors in need, strengthening micro-financing, making available multi-purpose credit cards to self-employed persons, and ensuring better coordination among development agencies.
Considering the urgent need for credit and developmental support in the unorganised sector, and given the limitations of institutions like the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD), the Commission felt the need for an exclusive, national-level financial institution. Called the National Fund for Unorganised Sector (NAFUS), it would supplement the inadequate efforts of existing financial institutions, and provide financial and other assistance to the unorganised sector. The report titled Creation of a National Fund for the Unorganised Sector (NAFUS) details the mandate, rationale and function of NAFUS.
(Read more at https://ruralindiaonline.org/)
Impact of Liberalization on Rural Banking in IndiaNimit Jain
This presentation analyses the impact of financial liberalization policies adopted by India post 1991 on the Rural Banking Sector. This presentation was originally submitted as a project in Economics in BFIA, Shaheed Sukhdev College of Business Studies, University of Delhi.
The Reserve Bank of India (RBI) was established in 1935 as the central bank of India. It regulates banking, money supply and interest rates in India. Some key roles of RBI include acting as a monetary authority, regulator of the financial system, manager of foreign exchange, issuer of currency and banking licenses. RBI also plays an important developmental role in promoting banking, industrial finance and exports. Recently, RBI has mandated online filing of FDI forms and capacity building certification for banks in areas like treasury operations, risk management and credit management.
Effectiveness of training @ canara bank project reportBabasab Patil
The document provides an overview of Canara Bank, a leading public sector bank in India established in 1906. It discusses the bank's financial performance over the last two years, achieving the highest net profit among nationalized banks in 2004 and 2005. The report also describes a study conducted on the bank's training programs, finding that the programs were successful and met respondents' needs and expectations. It provides suggestions such as introducing more marketing and product awareness programs.
The Narasimham Committee, established in 1991, submitted two reports that laid the foundation for reforming the Indian banking sector. The committee recommended reducing statutory reserve requirements to improve bank efficiency and productivity. It also recommended phasing out directed lending programs, adopting uniform accounting practices, and increasing capital adequacy requirements. The 1998 Narasimham Committee report further recommended strengthening the banking system, experimenting with narrow banking, increasing capital adequacy ratios, and updating banking laws. The committees' recommendations helped spur the emergence of new private banks and opened up India's capital markets.
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Enhancing Asset Quality: Strategies for Financial Institutionsshruti1menon2
Ensuring robust asset quality is not just a mere aspect but a critical cornerstone for the stability and success of financial institutions worldwide. It serves as the bedrock upon which profitability is built and investor confidence is sustained. Therefore, in this presentation, we delve into a comprehensive exploration of strategies that can aid financial institutions in achieving and maintaining superior asset quality.
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A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
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Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
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Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
1. Policy Considerations before Bank
Privatization – Country Experience
Dr. Ishrat Husain
Governor
State Bank of Pakistan
Presentation made at the World Bank, International Monetary Fund and Brookings Institution Conference on
“The Role of State-Owned Financial Institutions: Policy and Practice” held at Washington D.C., on April 27, 2004.
3. Privatization of Banking Sector in Pakistan
Background
Financial sector significantly altered in early 1970s with
nationalization of domestic banks under the Banks
Nationalization Act 1974.
The Pakistan Banking Council was set up to act as
holding company of nationalized commercial banks and
to exercise supervisory control over them.
4. Privatization of Banking Sector in Pakistan
By end of 1980s, the pre dominance of public sector in
banking and non bank financial institutions together with
instruments of direct monetary control was contributing
to financial repression, financial sector inefficiency,
crowding out of private sector and deteriorating quality of
assets.
SBP’s role as a central bank had been considerably
weakened due to the presence of Pakistan Banking
Council. Duplication of supervisory role was diluting
SBP’s enforcement of its regulations over nationalized
commercial banks
6. Privatization of Banking Sector in Pakistan
At the onset of the 90s, the Banking Sector in Pakistan
was dominated by the public sector banks which were
characterized by
• High Intermediation Costs
• Over-staffing and Over-branching
• Huge portfolio of Non performing Loans
• Poor Customer Services
• Undercapitalized
• Poorly Managed / Narrow Product Range
• Averse to Lending to SMEs/Housing & Other Segments
• Undue Interference in Lending, Loan Recovery & Personnel
7. Rationale for Privatization in Pakistan
Privatization process initiated in the early 1990s as part of
economic reforms programme
Establishment of Privatization Commission in 1991 for
disposing state owned enterprises
Mission statement of Privatization Commission
“Privatization is envisaged to foster competition, ensuring
greater capital investment, competitiveness and
modernisation, resulting in enhancement of employment
and provision of improved quality of products and services
to the consumers and reduction in the fiscal burden”.
Privatization Policy announced in 1998
8. Rationale for Privatization in Pakistan
1. Reduction in fiscal deficit
Fiscal deficit reached a high of 8.5 percent of GDP in
1987-88. Loss making making public sector
enterprises were a burden on the national exchequer.
2. Increase in the efficiency levels
Efficiency levels of public sector enterprises were
low. Production costs of public enterprises were high
as a result of political interference.
3. To foster competition
State owned units when sold to different parties
would result in healthy competition in different
sectors of the economy.
9. Rationale for Privatization in Pakistan
4. Broad basing of equity capital
Privatization would result in strengthening and
deepening of capital market when some percentage of
shares of public enterprises are sold to the public
through stock exchange.
5. Releasing resources for physical and social
infrastructure
More funds available for development projects.
Privatization of loss making enterprises would give
govt. more fiscal space
10. Modes of Privatization adopted in Pakistan
The Privatization Policy of 1998 outlined the
following modes of privatization:
• Total disinvestment through competitive bidding
• Partial disinvestment with management control
• Partial disinvestment without management
control
• Sales/ Lease of assets and property
11. The Privatization Process
1. Identification
2. Hiring of a Financial Advisor
3. Due Diligence
4. Enacting Regulatory and Sectoral Reforms
5. Valuation of Property
6. Pre-Bid and Bid Process
7. Post-Bid Matters
12. Steps taken for preparing banks for
privatization
1. Amendment in Banks (Nationalization) Act 1974 in
1990.
2. 11,101 workers out of 39,277 were relieved from HBL,
NBP and UBL.
3. 1646 branches of NCBs allowed to be closed.
4. Rs. 46.6 billion injected as equity to recapitalize the
banks.
5. NPLs worth Rs. 47.4 billion transferred to CIRC1
at
discount for disposal.
6. Tax refund bonds issued to NCBs amounting to Rs.
6.5 billion issued
1
Corporate and Industrial Restructuring Corporation established in 2000 for acquisition of
NPLs.
13. Steps taken for preparing banks for
privatization
7. Professional management installed in HBL, NBP and
UBL.
8. Boards of Directors reconstituted with private sector
individuals of integrity and eminence.
9. Promulgation of Privatization Ordinance in 2000
10. Introduction of incentive scheme for loan defaulters
11. Committee for Revival of Sick Units
14. Role of State Bank in Privatization
1. Analysis of issues, design of restructuring plan of
nationalized commercial banks (NCBs), monitoring
and implementation follow up.
2. Voluntary Separation Schemes for excess labor
designed and implemented with the financial
assistance of the World Bank.
3. Approval of the Chief Executives and Boards of
Directors of newly privatized banks according to the
‘Fit and Proper’ test
15. Role of State Bank in Privatization
4. Meaningful input on documentation viz-a-viz
Advertisement, Statement of Qualification (SOQ)
and Agreement for sale of shares and transfer of
management.
5. Screening and evaluation of the Strategic Investors
for clearance of purchase of 5% or more shares of
NCBs in order to ensure quality and competence of
buyer.
6. Resolution of the issues raised by the strategic
investors during the process of privatization.
7. Evaluation of bids
16. Banks privatized so far
1. Muslim Commercial Bank Limited
26 % shares were sold to the National Group in April 1991 for
Rs. 838.8 million. Another 25 % shares were offered for
subscription to the public in February 1992. Remaining shares
have been divested in January, 2001, November, 2001 and
October, 2002 for proceeds of Rs.1,287.2 million.
2. Allied Bank of Pakistan Limited
26 % shares sold to Allied Management Group (AMG) –
representing employees of ABL, in 1991. Another 25 % sold in
1993, resulting in transfer of ownership from government to
AMG.
3. Bankers Equity Limited
In June 1996, 51 % shares were sold to LTV Consortium for Rs.
618.73 million
17. Banks privatized so far
4. Bank Alfalah Limited
Highest bid of Rs. 1.64 billion received for sale of 70 % shares of
Habib Credit & Exchange Bank Limited (presently Bank
Alfalah) in June 1997. 2% shares were meant for the employees
28% shares sold in block for Rs.1,226.0 million. The shares not
taken up by the employees were also sold. Sale Purchase
Agreement was signed on 13th December, 2002
5. United Bank Limited
51% shares sold in October, 2002. Payment of US$ 176,907,858
and Rs.1,852,500,000 received
6. Habib Bank Limited
Highest bid of Rs.22.409 billion received from Aga Khan Fund
for Economic Development, for sale of 51% shares on 29th
December, 2003. Transfer to the new owners took place on
February 26, 2004.
18. Banks privatized so far
7. National Bank of Pakistan
23.2% shares have been divested through IPO/POs in
November, 2001, February, 2002 (Rs.373.0 million) November,
2002 (Rs.782.0 million), November, 2003 (Rs.604.0 million).
19. Privatization of Banking Sector in Pakistan
Units privatized to date
(Rupees in Billion)
1991 to Jun
2002
Jul 2002 to
Jun 2003
Jul 2003 to
Jan15, 2004
To Date
Sector No. Amount No. Amount No. Amount No. Amount
Banking 4 5.6 2 12.9 1 22.4 7 41.0
US $
710
million
Source: Privatisation Commission
20. Post-privatization Structure of Banking
Sector (March 2004)
Banks No. Assets Deposits Equity
Amount
(Rs.
Billions)
Share
(%)
Amount
(Rs.
Billions)
Share
(%)
Amount
(Rs.
Billions)
Share
(%)
State-
owned1
4 518.8 18.6 379.3 20.1 22.5 17.2
Private 20 1840.3 66.0 1292.3 68.5 92.8 70.9
Foreign 13 278.4 10.0 198.0 10.5 26.7 20.4
Specialize
d banks2
3 149.8 5.4 16.1 0.9 -11.1 -8.5
Total 40 2787.2 100 1885.6 100 130.9 100
Source: Banking Supervision Department, State Bank of Pakistan
1
Three small new banks were set up in the public sector during the 90s. These included the First Women Bank, set up
to provide credit to women entrepreneurs; and two provincial banks; the Bank of Punjab and the Bank of Khyber.
2
These include: Zari Tarqiati Bank Ltd, Industrial Development Bank of Pakistan and Punjab Provincial Co-
21. Privatization of Banking Sector in Pakistan
Case Studies
1. Muslim Commercial Bank
2. Allied Bank Limited
22. Muslim Commercial Bank
First bank in the public sector to be privatized
On 6th
April 1991, 26 % shares of MCB were sold to
National Group at a price of Rs. 56 per share, for a total
amount of Rs. 2.4 billion.
As part of the Sale Agreement, a further 25 % of shares
were offered for subscription to the public on 19th
February 1992.
Further shares were sold in January, 2001, November,
2001 and October, 2002 for proceeds of Rs.1.3 billion.
Upon completion of disinvestments of 51 % shares, the
application of Banks Nationalization Act 1974 ceased on
MCB
23. Muslim Commercial Bank
Financial Indicators (1994-2003)
Source: Financial Sector Assessment 2001-02, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
0
5
10
15
20
25
30
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Assets (%of assets of NCBs)
%
0
5
10
15
20
25
30
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Deposits (%of deposits of NCBs)
%
0
5
10
15
20
25
30
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Advances (%of advances of NCBs)
%
24. Muslim Commercial Bank
Non Performing Loans as % of Total Loans
(1993-2003)
Source: Financial Sector Assessment 1990-2000, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
0
5
10
15
20 1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
%
25. Muslim Commercial Bank
Return on Assets (1993-2003)
Source: Financial Sector Assessment 1990-2000, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
0.0
0.2
0.4
0.6
0.8
1.0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
%
26. Muslim Commercial Bank
Impact Analysis of Privatization
• Assets as a proportion of total assets of the nationalized
banks grew from 18 percent in 1994 to over 28 percent
by 2003 – an increase of 10 percentage points.
• Deposits as a proportion of total deposits of the
nationalized banks increased from 17.6 percent in 1994
to 26.5 percent in 2003.
• Advances as a percentage of total advances of
nationalized banks were 17.7 percent in 1990 which
had grown to 26.7 percent by 2003.
• NPLs as percentage of total loans varied between a low
of 11 percent in 1997 to a high of 18.6 percent in 1993.
27. Allied Bank Limited
Second bank to be privatized in the public sector
On 9th
September 1991, 26 % shares were sold to the
Allied Management Group, which represented the
employees of ABL at a price of Rs. 70 per share
On 23rd
August 1993, another 25 % shares were sold to
AMG at price of Rs. 70 per share
This resulted in transfer of ownership from Government
of Pakistan to AMG
28. Allied Bank Limited
• In 1999, it transpired that one of ABL’s major
defaulters had purchased about 35-40 % of ABL
shares from employees.
• In July 1999, SBP imposed restriction on transfer of
shares from employees to non-employees except on
prior approval from SBP.
• On August 3, 2001, the SBP removed the Chairman
and three Directors on the Board of ABL as they
were found to be working against the interests of
ABL and its depositors and appointed new Board.
29. Allied Bank Limited
ABL was excluded from list of privatization and the
strategic sale of the remaining 49 % govt. share was
transferred to the SBP.
In February 2004, 6 parties were pre qualified for bidding
30. Allied Bank Limited
Financial Indicators (1995-2003)
Source: Financial Sector Assessment 2001-02, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
0
2
4
6
8
10
12
14
1995 1996 1997 1998 1999 2000 2001 2002 2003
Assets (%of assets of NCBs)
%
0
5
10
15
20
1995 1996 1997 1998 1999 2000 2001 2002 2003
Deposits (%of deposits of NCBs)
%
0
5
10
15
20
1995 1996 1997 1998 1999 2000 2001 2002 2003
Advances (%of advances of NCBs)
%
31. Allied Bank Limited
Non performing Loans as % of Total Loans
(1993-2003)
Source: Financial Sector Assessment 1990-2000, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
0
10
20
30
40
50 1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
%
32. Allied Bank Limited
Return on Assets (1993-2003)
Source: Financial Sector Assessment 1990-2000, State Bank of Pakistan
Banking Supervision Department, State Bank of Pakistan
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
%
33. Allied Bank Limited
Impact analysis of privatization
• Assets as a percentage of total assets of nationalized
banks increased from 9.6 percent in 1995 to 12 percent
by 2002.
• Deposits as a proportion of total deposits of
nationalized banks grew from 9.8 percent in 1995 to
14.3 percent in 2003.
• Advances as percentage of total advances of
nationalized banks peaked at 15.5 percent in 1999 but
declined to 11.2 percent by 2003.
• NPLs as a proportion of total loans jumped from 16.1
percent in 1993 to 43.8 percent by 2003
34. Lessons Learnt
The Allied Bank was not transferred to a strategic
investor but employees. This approach proved to be even
worse than public sector ownership. Efforts are underway
to transfer the majority share to a private sector financial
institution through competitive bidding process.
In contrast, MCB was sold to a group of private
strategic investors who have turned around the bank and
improved all indicators including improved service to
customers, technology upgradation and cost efficiency.