Parliamentarians and experts calling for the central bank’s decision to backtrack on custody of the Warka Bank
07/03/2012 8:47
Baghdad / Orr 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 declare bankruptcy.
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, Warka and do it 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 Saleh b (the straw that broke the back of private banks) and admitted that the decision was taken 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 market banking. Salih stressed that we our reservation on the disposal of the Ministry of Finance above being bad for the banking system and financial we do not know her reasons for that, and here we had committed a fatal error report of the Inspection Committee also recognized the error seriously committed by the Central Bank and by 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 , adversely affecting liquidity. banking sources revealed that the Central Bank and after approval to close the 50 branches despite the presence of Movqat principle to open also took the initiative to issue another order is irrelevant in terms of Warka decided to keep stock buying and selling foreign currency in the bank, causing the transformation of Warka customers to another civil banks, 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 dish system ATM follows that arrived prepared 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.
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 trading is always a paragraph supporting the private sector to gain publicity her, and the truth is that they are always one of the strongest warriors of the sector in all branches of industrial, banking and agricultural . “and wondered 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 has not not a sufficient reason for the suppression of the private sector, although the latter are better off in terms of government set up branches and speed 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 address the situation which is universally applicable, any damage to the bank, we will find the central banks, countries and the 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. and also touched on the incident to bankrupt my family bank in 1995 for the one initiated by Islamic banks and central monitoring sum of one billion and a half to help him, and there are many precedents latest of America’s government to pump $ 700 billion for banks to end the global financial crisis.
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 a liquidity crisis and there is a period drought liquidity, here intervene to protect the bank and also the customers here are not going to resort to liquidate any bank my family, but we 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 financial market of Iraq and 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 Albjara decision of the Central Bank of Iraq’s recent imposition of for guardianship and asked him to find a solution more realistic like those in place worldwide during the financial crises, because such decisions will lead to disastrous consequences 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 decrease in deposits ie liquidity of these banks and thus will stand latter is unable to carry out its functions and in particular the exploitation of liquidity in the investment projects, and we will reach to sector investment 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 pregnancy 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 banks, Arab and foreign countries are both” Arab Banking Corporation (Bahrain), the Agricultural Bank of Turkey (aprons), Bank Melli Iran, Lebanon’s Byblos Bank, Antrcntantl, Bank of Beirut and the Arab countries “.” also made the financial institution of the Iraqi seven 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 Banking Act Iraqi headquarters in 2003. ” The Iraqi government decided recently approved to facilitate the procedures for issuing letter of credit of appropriations of less than (4) million dollars to support private sector Iraqi banking and contribute to the revitalization of investment. Executive Director of the Association of private banks Abdul Aziz Hassoun between that experience has shown banks offer eligibility for 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 on the threats of the central bank for the banks need to raise capital to 125 billion dinars / 100 million, and otherwise will be liquidated or merged? said Abdul Aziz Hassoun that all banks have fulfilled this requirement, but managed five banks to raise capital for more than the figure mentioned much
