The Banks ( Nationalization) ACT, 1974

Nationalization of Banks 

We have gone through the evolutionary process of banking in Pakistan. We know that by June 30^th 1948 the number of branches in Pakistan was only eighty one. However with the establishment of State Bank of Pakistan and efforts of the government, the number of schedule bank increased to 14 with 3323 branches all over Pakistan and also 74 branches in foreign countries by Dec 31^st 1973. The commercial banks grew at tremendous speed and mobilized savings from the public and also contributed a lot in financing business and corporate sector. However it was considered that although banking sector was growing but the fruits of development were limited only to the urban population and corporate sector whereas most of the sectors, people and under develop regions were not getting due share. As such it was decided that banks should be nationalized.  For the implementation of this objective Nationalization Act 1974 was promulgated.

Objectives of Nationalization

The nationalization was carried out with a view to achieve the following objectives:

-- Disbursement of funds to the desired channels to achieve the priorities set out by the government for social welfare projects. 

-- Equitable distribution of credit to different classes, sectors and regions.

 Salient features of The Bank (Nationalization) Act, 1974

The Act extends to the whole of Pakistan. 

Act to override other laws.- This Act shall have effect not withstanding anything contained in any other law for the time being in force or in any agreement, contract, award memorandum or articles of association or other instrument.