What Were The Causes Of Nationalization Of Banks In Pakistan?


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Sajid Majeed answered
Following were the main causes of Nationalization.
The banks were nationalized to provide the fair distribution of Credit. All the classes of the public will enjoy the credit facility.

There was a completer hold of few capitalists over the public savings. Now after nationalization their monopoly finished.

Before the nationalization the Agriculture sector was ignored but now after nationalization proper importance is given to this sector. Now output of this section is increasing day by day. It was also stated that credit needs of the small businessmen can be met if the banks are in the public sector.

Before nationalization, there was only profit motive for the banker and service motive was ignored. So it was necessary that banks should be nationalized.
It was claimed that nationalization of banks will encourage and stimulate mobilization of savings in the country.

When the credit facilities will be provided to the underdeveloped areas, the marginal rate of capital return can increase. But it was possible only if the banks were nationalized.
It was also claimed that State Bank can minimize the fluctuation in the economic activity with the help of nationalized Commercial Banks. So price stability can be provided by not issuing credit for the hoarding and smuggling.

The banks were also Nationalizes on this ground that public will feel more security in depositing the money in nationalized banks.

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