LONDON: State-rescued lender Royal Bank of Scotland said Monday that a deal to sell its Pakistan unit to MCB Bank for 54 million pounds had lapsed.

RBS had agreed in August to sell the operations to MCB in a transaction that was expected to be completed in the final quarter of 2009 -- but MCB did not manage to gain regulatory approvals, the group said in a statement.

"The agreement with MCB provided that if the necessary regulatory approvals are not obtained and closing of the transaction has not occurred on or by 31 December 2009 then the agreement and the transaction shall lapse," RBS said.

"The necessary regulatory approvals were not obtained, and closing did not occur, by 31 December 2009 and accordingly the agreement and the transaction have now lapsed," the bank added.

RBS is 84-percent owned by the state after receiving a massive bailout from the government amid the devastating global financial crisis.

Karachi-listed MCB has around four million customers and operates 1,026 branches within Pakistan.