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The banking reforms turned out to the transitional and temporary step and hardly after 18 months have the government nationalized the banking system. Thus through the nationalization bank act 1974, SBP and all commercial banks incorporated in Pakistan and carrying on business in or out side of the country were brought under the government ownership with effect from January 1974. The ownership and management of all Pakistan banks stood transferred and rested in the federal government. The shareholders were provided compensation was equal to the brake up value of the shares in case of commercial banks. For the SBP shares the amount of compensation was estimate on the basis of average of the clearing quotations during the 6 working days preceding nationalization. The chairman, director and chief executive of various banks were removed from their offices other than those appointed by the federal government and the state bank. The central board of banks, managing comities and similar other bodies were dissolved. A Pakistani banking council was established for nationalized commercial banks to co-ordinate their activities.

As a result of merger of banks the following 5 major banking companies were formed.

1. National bank of Pakistan

2. Habib Bank Ltd.

3. United Bank Ltd.

4. Muslim commercial Bank Ltd.

5. Allied Bank of Pakistan

Causes of Nationalization

The nationalization of banks may be justified on the following grounds.

1. Large business and industrial houses dominate the lending policies of commercial banks; this brought forward the problem of concentration wealth.

2. Commercial banking operations were guided by profit motives and as a result the backward regions and the small entrepreneurs were never been their favourite customers.

3. The operation of banks, unlike after business, have direct implication on the entire national economy. For the instance if the banks raise the cost of their credit, the cost of every thing may go up.

4. Unhealthy complications among banks can lead to financial and economic problems.

5. The flow of bank advances towards national priority sector in general is not forthcoming because private banks ate not profit oriented.

RESULT OF NATIONALIZATION

Although there are doubts about the positive result of the nationalization but we can say that the nationalization of the banks provided efficient professional management to expand making services in every nook and corner of the country. Banks laid full emphasis on their lending policies on priority sector and national building projects, which discouraged non productive and un-healthy activities like speculation and hording; there was also a recorded increase in the foreign branches of Pakistan banks.

The growth of Pakistani banking system was significant. The banking facilities expanded in the rural area. The bank credit increased sharply especially本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。