Purpose: The objective of the present research is to analyze the effect of privatization on banks' profitability and efficiency. It particularly makes a comparison of privatized bank performance with the public sector bank. Also, it assesses how the institutional structures and regulatory policies contribute to the sustainability of privatized banks in the long run. It is vital that policymakers, investors, and financial institutions understand the consequences of privatization on banking performance to support growth in the financial industry. The goal is to determine whether privatization creates enhanced operational efficiency, profitability, and competitiveness, and how these elements contribute to the stability of the banking industry in developed and developing economies. Design/Methodology/Approach: The study uses the mixed-method methodology, where there is a synthesis of quantitative data analysis of finances (such as profitability ratios, efficiency, and sustainability measures) with qualitative analysis from industry representatives, bank executives, and government regulators. Some privatized banks and public banks' financial ratios over a set time period are examined to get an insight into performance changes. Moreover, interviews and questionnaires with stakeholders from the banking industry are carried out to better understand the involvement of institutional settings and policies. This two-pronged method provides a holistic understanding of the privatization effect, combining empirical information with specialists' opinion. Findings: The research discovers that privatized banks tend to perform better than their public sector counterparts in profitability, efficiency, and financial sustainability. Some of the key performance measures like return on assets (ROA), return on equity (ROE), and asset management efficiency are considerably better in privatized banks. In addition, institutional and regulatory backing is recognized as a major element in making privatized banks continue to excel in the long run. The study also discovers that privatized banks manage their resources more efficiently and innovate their services more, leading to competitive advantage over the public banks. In spite of these benefits, privatized banks are confronted with issues like increased operational expenses and regulatory restrictions which must be considered. Originality: This study makes new contributions to the area by emphasizing privatization's long-term impact on bank performance in terms of sustainability and institution roles. Whereas prior research has primarily concentrated on short-term impacts, this paper presents insightful information on how privatized banks are able to sustain profitability and efficiency over the long term. The function of institutional structures and governance systems is discussed in detail, thereby making this study unique by merging financial performance analysis with institutional theory. Results are likely to enhance the general debate regarding privatization in banks, particularly developing economies, where the concept of privatization is relatively new. Research Limitations/Implications: One constraint of this research is the restricted scope of data since it is based on a limited set of privatized and public banks, which might not reflect adequately the world variations in privatization effects. Secondly, the period of the research is limited to certain years, and some more recent trends or developments could have been overlooked. Although the results are useful for observing the overall effect of privatization, they would not necessarily generalize to other geographic regions or other countries with potentially different economic dynamics. Future researchers could broaden their scope to use more banks and explore the part played by economic factors at an international level to influence the behavior of privatized banks. Yet the study holds practical lessons for policymakers who plan to use privatization as an instrument to advance banking sector efficiency. Social Implications: The research has important social implications, especially in developing economies where banking sector privatization is a policy choice. Through enhancing the profitability and efficiency of banks, privatization can result in greater financial inclusion, improved access to credit, and economic growth. The research indicates that privatized banks have higher chances of launching innovative financial products and services, which benefit consumers. Further, better performance from privatized banks can make the financial system at large more stable and contribute towards economic stability. The policymakers would be able to frame better plans of privatization by using insights gained from this study so that the privatized banks are profitable but also deliver good social and economic development contributions.