The merger of NDLC-IFIC Bank (NIB) and the Pakistan Industrial Credit and Investment Corporation (PICIC) made NIB the 7th biggest bank in the country with 240 branches and a paid-up capital in excess of Rs. 27.5 bn (PKR). Temasek Holding is the single biggest investor in NIB and this group has an investment portfolio of approximately $100 bn. The legal merger of NIB, PICIC and PCBL happened on December 31, 2007. During the merger, NIB followed in letter and spirit all the regulations and code of conduct of Securities and Exchange Commission of Pakistan, and it is indeed a glaring example of compliance in corporate governance.

Institutionalization of corporate governance practices dominated policy agendas in both developed and developing countries during the 1990s (Bari and Cheema, 2003). The need for corporate governance implementation was also felt during mergers, takeovers and/or even privatization process. Governments, stock exchanges and business associations across the world are competing to produce corporate governance guidelines (Mir and Nishat, 2004). These guidelines are thought to be of great significance for developing countries that are struggling with improper legal systems.

Mergers and acquisitions, which are poorly executed or are not in line with the code of corporate governance, pose a threat to the banking system in general and to the participating institutions in particular. This paper gives an overview of the merger of NIB and PICIC, which followed in letter and spirit all the regulations and code of conduct of the Securities and Exchange Commission of Pakistan (SECP) and is indeed a glaring example of compliance in corporate governance. The single case methodology is used in this research paper.

Corporate Governance Journal, NDLC-IFIC Bank (NIB), Pakistan Industrial Credit and Investment Corporation (PICIC), Securities and Exchange Commission of Pakistan (SECP), National Development Leasing Corporation (NDLC).