Bank Privatization and its Effects on Efficiency Increase and Performance Improvement of Banks

In recent years, divesture of state-owned banks to private section has become main part of privatization programs in different countries around the world. Governments try to increase the efficiency and improve the performance indices of divested banks at first, and accelerate their economic growth in the end through divesting banks ownership. Although divesting bank ownership is expected to overcome influential problems of efficiency and performance, studies show that governments should consider improving business climate, reducing investment risk, encouraging foreign investors, divesting bank ownership maximally and submitting governance and control of banks as well as their ownership in order to achieve these goals. Also they should show their determinations of establishing new private banks.