Central Bank decides custody of the Warka Bank

Wednesday, March 7, 2012 06:15

BAGHDAD / Baghdadiya News / .. at the time decided the Iraqi Central Bank to impose guardianship on the Warka Bank, described the members of Parliament in the Economic and Financial Committee and officials in the banking sector this step (b destroyer)

Of the banking sector, which is the main gate in the process of attracting foreign investment, among bankers that the decision to trust is not justified, especially that of Warka, which was founded in 1999 still has the financial strength did not announce bankruptcy. A statement issued by the Club journalists economists Iraqi got / Baghdadiya News / a copy of it, that the Central Bank of Iraq admitted in a report released by the Directorate of banking and credit control department inspection, that the reason for the lack of liquidity to the Warka Bank and also the rest of the private banks is the decision of the Ministry of Finance 402 on 15/1/2009 and ordered by all ministries and government departments to withdraw their deposits from private banks, and do it Warka and returned $ 800 billion dinars during the period of one month.

Decision of the Ministry of Finance said he called the deputy governor of the Central Bank of the appearance of Mohammed as “the straw that broke the back of private banks,” and admitted that the decision was made suddenly and no one knows the reasons that called for it, and turned the private banks of the banks in the true sense to just financial institutions rely solely on banking market.

We confirmed our reservation for the conduct of the Ministry of Finance as the above is bad for the banking and financial system does not know her reasons for that, and here we had committed a fatal error

Report of Inspection Committee also recognized the error seriously committed by the central bank, and that any Committee is part of the bank, which showed that the central imposition of the death on the Warka to close all branches that have not obtained approval of a final (50 branches), causing the withdrawal of customer deposits in those branches at once, which impact negatively on liquidity.

Banking sources revealed that the Central Bank and after approval to close the 50 branches despite the presence of Movqat principle to open initiative also issued another order is irrelevant where decided to keep the Warka of the stock sale and purchase of foreign currency in the bank, causing a shift customers Warka banks another civil, it which increased the suspicions of collusion of former officials in the Central with these banks.

Also touched on the central bank to the size of the remaining cash to Warka, amounting to 13% while that must have a minimum of 30%.

He has Warka, one of the largest Iraqi banks at all and most modern in terms of the application of electronic banking more than 128 branches and the number of employees exceeded 885 employees, while the number of clients 128 thousand customers among them foreigners, while the preparation of deposits 89 A and deposit.

Central Bank, according to his confession, the Warka is the first system has been introduced ATMs that have reached their preparation in all branches of more of 346 device and the number of cards (MasterCard) 75 thousand and the number of points of sale located in shops, markets and restaurants 1300 device and has a correspondence with more than 40 bank Bank and Arab and foreign.

With a report issued by the Central Bank also revealed that the Warka managed to get the approval of a loan from the Rafidain Bank, with the consent of the Minister of Finance not be disbursed the loan amount up to now because of obstacles placed Rafidain Bank, and here it will be incumbent on the central bank granting Warka loan fast and urged the government banks to Cooperation with Warka granting loans and be patient in demanding payment. and urged him also to participate with Arab and international banks.

Economic expert Abbas Ghalibi explained his part, he, unfortunately, we found the government and since 2003 until now tend more to the solutions (prosthetic) and did not hear one day that it had developed a strategy to study the problem scientifically and to find effective solutions to them, and this is what we see in its dealings with the private banking sector .

Banking expert Ghazi Kanani between the cause of failure of the banking sector is a government decision that prevented the government departments to deal with it.

He Kanani said the government always trade a paragraph supporting the private sector to gain a propaganda, and the truth is that they are always one of the strongest warriors of the sector in all branches of industrial, banking and agriculture. “

He asked Kanani reasons for preventing government departments from dealing with banks eligibility are led to the accumulation of the money supply within the state banks by 94 per cent and most of them government deposits, noting the reluctance of the work of some private banks was caused by corruption of state banks, or government decisions, and this was not the cause enough to suppress the private sector, although the latter better off than the government set up branches in terms of speed and performance and provide mechanisms, while the government completely the opposite of what we have mentioned.

Official of the Association of private banks confirmed that the Association is currently discussions with the Central Bank to resolve this problem and raise the guardianship of the Warka Bank.

The source, who declined to be named, said everyone recognizes the existence of faltering in the work of Warka because of the government’s decision to withdraw their deposits, but here was the central bank to address the situation which is universally applicable, any damage to the bank, we will find banks, states the central monetary authority and the Ministry of Finance to follow procedures to address the situation.

The source added that the Warka Bank did not declare bankruptcy, according to figures available, our imam Vemogodat Warka cover liabilities and increase it much, but stopped payment on the borrowers and the problems of government decisions caused the lack of cash to Warka.

The source revealed for the Warka had previously, and lend a hand to banks announced Avlasshma in 2005 and two each from the Bank of the pond and the Iraqi Islamic, and the experience of Warka was the rehabilitation of the two banks assisted the CBE board and is currently working of these banks do not have a problem, here are the private banks also help Warka in this ordeal.

He referred also to an incident bankruptcy bank my family in 1995 for a Islamic banks and initiated the central monitor the sum of one billion and a half to help him, and there is ample precedent most recently the Government of America to pump $ 700 billion for banks to end the global financial crisis, always governments go towards raising the damage on citizens and shareholders.

And that the decision to the tutelage of the Central illegal it did not apply the necessary conditions for the guardianship, and must begin with the Central by the other and, unfortunately, give the Central Bank Law of 2004 wide powers of the Bank in its decision-making, and began its sudden and will leave a negative impact on the sector liquidator in general.

CBI reply in the words of his deputy, the appearance of Mohammed Saleh these opinions that his bank is the garrison of the device the Iraqi financial, guardianship here does not mean liquidation but is a form of protection, and any failure of the Bank or stumbling here’d take action and we shall manage the Department Warka until they returned to put it correct.

And that there are stages in the lag, for example there is a liquidity crisis and liquidity drying stage, and here intervene to protect the bank and the customers and also here will not resort to the liquidation of any bank, but my family will stand beside him.

We deal with all banks to that of the same level and we consider a single market in the interest of the Iraqi financial market and its development.

Member of the parliamentary economic Nora Albjara stressed that many of the government decisions relating to the economic sector, and after careful consideration you will find them contradictory with the orientations of other government.

She said the Economic Commission of the Council of Ministers has recently decided to support private banks and also re-powers of the opening credit bank it for the benefit of foreign investment companies operating in Iraq, and a few days after a decision the tutelage of the right bank my family, we do not know the reasons for this discrepancy in the decisions.

She Albjara Many of the decisions are made without reference to its negative effects on investment and attract foreign funds for Iraq, which fear is always of the market is suffering the disorder, and the government created this strike is offset by the laws still suffer Nicosat required by the investor to secure protection for his money, all will limit the process of attraction.

And refused to Albjara decision CBI latter impose a trusteeship and asked him to find a solution more realistic like those in place worldwide during the financial crises, because such decisions will lead to catastrophic results, overlooked the bank is that the citizens of Iraq from the category of customers of banks will be reluctant to deposit their money in banks, and this will lead to a lack of deposits in any of these banks’ liquidity and thus will stand the last unable to carry out its functions and in particular the exploitation of liquidity in the investment projects, and we will reach to the investment sector is paralyzed after a period of time.

Revealed that Iraq is one of the few countries that still suffer from the use of cash cache in business dealings and daily, all the world and arrived to the disappearance of the phenomenon of carrying cash in the pockets and move them, either in Iraq, we find the concerned authorities encourage the phenomenon first and create more problems.

“Working in Iraq now six Arab and foreign banks, namely the” Arab Banking Corporation (Bahrain), the Agricultural Bank of Turkey (aprons), Bank Melli Iran, Lebanon’s Byblos Bank, Intercontinental, Bank of Beirut and the Arab countries. “

“As a financial institution made up of seven Iraqi state banks, five of them specialized and cares for the industrial, commercial and housing, while the number of private banks for more than 30 banks, seven of them Islamic, all of which are subject to the law office of Iraqi banks in 2003.”

The Iraqi government decided recently to facilitate the approval procedures for issuing letter of credit of appropriations of less than (4) million dollars to support the Iraqi banking private sector and contribute to the revitalization of investment.

Executive Director of the Association of private banks Abdul Aziz Hassoun between that experience has shown provides private banks to the government in terms of staff trained abroad and modern systems and the spread of its branches and the size of its capital and to achieve a good profit and the size of treated clients with the breadth and openness to the States branches are supported, but government harassment going right.

And threats on the central bank for the banks need to raise capital to 125 billion dinars / 100 million, and otherwise will be liquidated or merged? Abdul Aziz al-Hassoun that all banks have fulfilled this requirement, but managed five banks to raise capital for more than the figure mentioned much. / Finished / agencies