Warka Bank placed under ‘Guardianship’

Posted on 05 March 2012.

Iraq’s central bank has reportedly placed private bankWarka Bank under guardianship to supervise it through insolvency.

Warka Bank had been in talks with Standard CharteredPlc to sell a stake last year, but they were not successful.

According to the report from Reuters, Mudher Kasim, deputy governor of the central Bank of Iraq, said:

We gave Warka a chance to have Standard Chartered to be a partner but that did not happen, so there was nothing we could do as a financial authority … but to intervene as a guardian.

When the bank loses its capital, fails in its financial operation and faces an unsolved problem, the central bank according to its law, intervenes as a guardian and appoints a new temporary administration to run this bank.

He said the central bank would appoint a new administration to run Warka Bank, which would be given a month to appoint an auditor to determine how to restructure it and whether it needs to sell assets to raise capital.

Abdul-Aziz Hassoun, executive director of the Iraqi Private Banks League, said in August Warka needed less than 100 billion Iraqi dinars ($90 million) to enhance its liquidity.

(Source: Reuters)