Iraq needs banking reform and international support
General Manager at the Central Bank’s (morning):
select banking expert glitches which impede the development of the work of the banking system, pointing to the efforts made by the Central Bank of Iraq in this regard.
said Director General of Statistics and research at the Central Bank of Iraq, Walid Idi Abdul Nabi In a statement to the (morning) that the banking system in Iraq consists of 47 banks including 7 state banks are (Mesopotamia, good, Iraqi Trade, Agricultural Cooperative, industrial, real estate, and Iraq) in addition to (40) private banks including the ten branches of foreign banks, as There are seven posts of Arab and foreign in the capital of Iraqi banks,
which allowed the Banking Act No. 94 of 2004 and regulations issued thereunder post these banks in the capital of Iraqi banks have ranged from such participation between 45 percent and 75 percent in some banks, these banks and formations along with the Central Bank of Iraq a banking system in Iraq.
And on the question of the morning of the reasons for the poor performance of banks in the implementation of development programs? Said Idi Sawafik now statistical indicators of the banks and you can imagine the size of the defect to Apple challenges facing the banking sector, has total assets of the government banks up to (131.2) trillion dinars (12.5) trillion dinars to the private banks up to 30.12.2011 for a total assets (143.7) trillion dinars, while the reserves of capital (1.6) trillion Ddinrellmassarv government and (191.0) billion dinars for private banks, and total deposits (56.1) trillion dinars share of governmental (49.8) compared to (6.3) trillion dinars for private banks.
Turning Abdul Prophet to the total credit cash and promissory where it reached (38.8) trillion dinars and share Alcbrkadh banks to government, however, that balances investment banks evolved to $ (6.2) trillion dinars either Mi_khas overdue debt repayment amounted to (459.3) billion dinars, the share of government of which (190.1) billion dinars, compared to (269.2) billion to private banks. said that the average liquidity ratio in banks 52 percent and is higher than the ratio Almaaariaalbalgh 30 percent while the percentage of credit cash promissory to the capital of banks and reserves all (1.1) times are much lower than the percentage specified under the Banking Act and the ( eight-fold) of capital and reserves, and seeks Central to require banks to submit them to become five times the capital in the future. pointing out that all the banks have achieved a good percentage of the adequacy of capital except the Rafidain Bank as is currently undergoing a period of restructuring for the purpose of developing its business, where will this percentage improvement in the near future.
in light of this fact, how do you see Aotakimon the performance of the banking sector?
truth and talk is still the expert banking and general manager in the Central that there are notes I made clear in this regard, including that there is a decrease in density of banking is the existence of a bank branch and one for every 42 000 people, which is low analogy for global normative amount of one bank for every 10 thousand people and you can imagine the volume of defaults in the banking awareness Besides, there is the predominance of familial nature in most of the private banks, which means the Union of administration with the property and this is incompatible with the principle of good governance in the banking and the requirements of international recommendations in pursued.
A Note another very important regarding the absence of strategies Banking actors and the detailed plans the annual for the majority of banks and provided by the law of banks, while lacking the capital market in Iraq to the institutions retaining the banking system such as insurance companies on deposits and the other on large loans, and the company to study the market risk eight banking services are not commensurate with the requirements and economic needs in the light of the market economy, with a number of services up to (15) service compared to making available of material (27) of the Banking Act, which amount to more than (50) banking service, as well as the low use of banking technologies and sagging of the administrative structure in many of the banks and especially the government.
He Abdel Nabi that there are other problems related to high volume of loans outstanding, which amount to (193) billion dinars for the benefit of government versus (50) billion dinars to the private banks.
banking reormabout the challenges that you have given to face ?
here I must explain that nothing in this regard, we have adopted the central bank inter actions to improve the performance of the banking system, including activating the government banks specialized three through the conversion of its functions to the banks, development and work to strengthen their capital according to the decision of the Economic Commission and approval of instructions for the establishment of Islamic banks and to allow the conventional banks open windows to the practice of Islamic banking, also sought Central to the application of standard disclosure and transparency and improve the performance of banking institutions, governmental organizations and the development of efficient staff of the central through training courses and develop the use of automation and software in the banking system and the development of policies relating to credit and investment and to address concentrations of credit and strengthen the departments of internal control and focus efforts on collection of bad debts and the development of reserves to meet the risks and other other measures.
Do you think that these measures are enough to solve the problems of the banking system and financial sector as a whole?
replied the Director-General of the Central Bank, Walid Idi Abdul Nabi concluding dialogue with (both) is not enough, but we need a process of radical reform is not for the banking system only but for the financial sector as a whole should be the use of international institutions and the adoption of Notes the report of international and internationalist to the International Monetary Fund on the financial sector in Iraq and to coordinate measures monetary and fiscal policy towards the creation of financial and banking sector is able to accommodate the requirements of the Renaissance development that awaits the new Iraq and without the banking system developed can not be achieve development.