The purpose of this study is mainly to empirically examine the practice of budgeting andrnbudgetary control system and its impacts in private banking industry in Ethiopia. Beside this, itrnalso tries to identify problems associated with budgeting and budgetary controls and offerrnalternative solutions. The descriptive research design was used. The data that was used for thernstudy is a primary data collected using structured questionnaire from 128 respondents randomlyrnselected from all private banks.Purposive or judgmental sampling was applied to select targetrnworking units while simple random sampling was used to select respondents from these units.rnThe descriptive statistics was used and STATA 14 plus Excel Spreadsheet were appliedforrnconducting the data analysis. The study revealed that private commercial banks have a budgetingrnand budgetary control system in place. It was found out that a budget and budgetary controlrnaffects the financial and non-financial performance of the banks. That is, the study shows that thernpresence of an effective budget and budgetary control system can improve the overallrnorganizational performance of the banks. However, according to the result of this study, theirrnbudget and budgetary control system is not effective as they failed to comply with the majorrnessentials of an effective budgeting and budgetary control systems. Moreover, the study resultrnshows that there are problems that should be addressed by the senior managers so as to improverntheir budget and budgetary control systems. The study recommended that banks should advancerntheir budget and budgetary control system to be fully benefited from the system to improve theirrnoverall performance. The banks should ensure full participation of all concerned staffs in theirrnbudgeting system and also delivercapacity development and awareness creation trainings on thernconcepts and techniques of budget and budgetary control systems. Moreover, there should alsornbe application of an appropriate information technology tool in the banks budgeting system.