Custody decision on the “Warka” raises concerns of the Iraqi banking sector

Posted       08/03/2012 10:41 PM

The decision by the Iraqi Central Bank put bank «Warka» Iraqi Investment and Finance under the trusteeship system, wide reactions in the banking sector, that accompanied the crisis of the bank since its inception two years ago, when the bank faces a liquidity crisis resulting from the Iraqi Ministry of Finance to issue instructions to withdraw balances of government accounts of private banks immediately, and was on the bank to respond to this procedure.
The watchers estimated the amounts withdrawn from it at 800 billion Iraqi dinars (700 million dollars), augmented by withdrawals of depositors. They said the need to leave this thing a negative impact on the Iraqi banking system, which dealt with the statements and media specialists, in addition to political circles, a lot recently.

She pointed out that the circles on the bank liquidity crisis would not have been up to the extent to which if the follow-up and monitoring the performance of the bank are available from the agencies responsible for the sector. The World Bank, through the follow-up of financial conditions in Iraq, issued a report in June last year, pointing to the importance of strengthening the banking system of government and private sectors.

According to sources in the sector that the conditions of «Warka Bank», and before «Basra International Bank for Investment», which did not happen depositors and shareholders in which any result since placed under the guardianship of two years ago, left a major impact on the banking sector. The Central Bank of Iraq to take measures to address the situation through the laws in force.

According to previous reports that «the Warka Bank» was entered last year in talks with the bank «Standard Chartered» British to sell a stake in the shares, but the talks have reached a dead end, so it was not before the Central Bank of Iraq but to intervene and take a decision to put the bank under the trusteeship.

The administration sent the bank a letter to the governor «Central» reporting that put the bank under the trusteeship will exacerbate matters, it is not known how will manage the trust bank without providing the liquidity needed, and that the decision will make the debtors of the bank evade payment of their debts and Atelmuson roads all to avoid them