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Cabinet gives public sector companies the right to open bank accounts in private banks


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The Committee on Economic Affairs
 
 
Cabinet gives public sector companies the right to open bank accounts in private banks


 

Author: HA 
Editor: HA 25.5.2015 thirty-five past five p.m. number of readings: 466 

 


 

 

Long-Presse / Baghdad 

The Council of Ministers approved, on Monday, the granting of public sector companies deposit their money option and open bank accounts, as well as to start gradually depositing the salaries of staff of the Chambers of central funding in private banks, as demanded the Ministry of Finance to open allocations among private banks without passing commercial bank, decided to include farmland in the liberated areas within the agricultural plan for the current year.

A statement issued by the Deputy Prime Minister Ruz Nuri Shaways Office received a (long-Presse) a copy of it, that "the Committee on Economic Affairs held its 14th headed by Chairman of the Committee on Economic Affairs Shaways," noting that "the Commission agreed to give public sector companies the option to deposit their money and open accounts in private banks, as well as the deposit and the distribution of its employees' salaries through these banks. "

The statement added that "the Committee agreed on the gradual implementation of the deposit of the employees and retirees of the Chambers of central funding salaries in private banks, taking into account the need to provide the branches of these banks, so as to ensure the provision of services to the beneficiaries of this system and make sure banks the situation in coordination with the Central Bank."

The statement pointed out that "the Commission approved the establishment of private banks issuing certified instruments and accepted by the government departments and public companies, with the bank's commitment to providing sufficient balances in their accounts with the Central Bank of Iraq and the lack of exposure, and otherwise the bears banks legal consequences, have the same exposure to stop dealing with this mechanism ".

He called the Commission according to the statement, "the Ministry of Finance and the Central Bank has adopted the Committee on Economic Affairs Resolution No. S.l / 495 on 18.11.2014 on the opening of letters of credit to the private banks up to ten million dollars without passing Iraqi trade bank," noting that "the Commission It decided to include acreage strategic crops in the liberated areas, which were within the agricultural plan for 2013 in the agricultural plan for this year. "

The Committee agreed according to the statement on the "do that each of the Rafidain and Rasheed deposit part of their money to the special private banks, and investing those funds in investment projects in accordance with the economic feasibility studies with a sufficient safeguards guaranteed non-refundable and subject to the conditions set by the two banks after studying the financial condition of the bank Special ".

It pointed to the "Commission approval of the Trade Bank of Iraq to open credit lines with private banks and under the supervision of the Central Bank of Iraq, on condition taking adequate safeguards and adhere to the ceiling specified provisions of article (30) of force Banking Act," noting that "the Commission directed the state departments all accept letters of guarantee issued by private banks with a commitment to the regulations and instructions issued by the Central Bank of Iraq and associated with the approval of the Committee on Economic Affairs ".

The statement pointed out that "the Commission has agreed to a contract and the Ministry of Transport / General Company of Iraqi Airways with the International Air Transport Association".

 And the Iraqi banking system consists of 54 banks, including seven state-owned newly established Islamic one, and there are 23 private commercial banks, including Islamic nine. There are also 15 branches of foreign banks, and there are many institutions that do some banking, of which 34 money transfer company, and nearly 200 belonging to the banks foreign exchange company or deal with the banks, with the Loan Guarantee Company and to finance small and medium enterprises, with two companies for services of electronic banking and card Smart, in addition to nearly 800 branches and subsidiary banks spread over Iraqi provinces.

And witness the private sector has deteriorated significantly after the year 2003, due to lift government support him, which led to most of the laboratories and factories stopped working because of their inability to compete with imported subsidized goods in the countries where they come from, which imported large fee operations are not subject, as well as local problems resulting from fuel and energy crises and lawlessness, and aging equipment.

 
 
 
 
 
 
 
 

http://www.almadapress.com/ar/news/49075/%D9%85%D8%AC%D9%84%D8%B3-%D8%A7%D9%84%D9%88%D8%B2%D8%B1%D8%A7%D8%A1-%D9%8A%D9%85%D9%86%D8%AD-%D8%B4%D8%B1%D9%83%D8%A7%D8%AA-%D8%A7%D9%84%D9%82%D8%B7%D8%A7%D8%B9-%D8%A7%D9%84%D8%B9%D8%A7

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This is article 30 of the Banking Law

 

Article 30 Large exposures -27 - ANNEX A 1. No bank shall grant credit to a person if as a result thereof: a. the aggregate outstanding principal amount of all of the bank’s credits to that person would exceed the equivalent of fifteen percent, or such lower percentage as specified by regulations issued by the CBI, of the bank’s unimpaired capital and reserves (large credit exposure), without obtaining prior approval of the CBI; b. the aggregate outstanding principal amount of all of the bank’s credits to that person would exceed the equivalent of 25 percent, or such lower percentage as specified by regulations issued by the CBI, of the bank’s unimpaired capital and reserves; or c. the aggregate outstanding principal amount of all large credit exposures of the bank pursuant to sub-paragraphs (a) and (B) would exceed the equivalent of 400 percent, or such lower percentage as specified by regulations issued by the CBI, of the bank’s unimpaired capital and reserves. 2. The limitations specified in paragraph (1) shall not apply to any principal amount of credit that is fully secured by readily marketable collateral in accordance with the standards prescribed for that purpose by regulation of the CBI, provided, however, that no bank shall grant such secured credit if, as a result thereof, the aggregate outstanding principal amount of all its secured credits to the person receiving such credit would exceed the equivalent of 20 percent of the bank’s unimpaired capital and reserves, or such lower percentage as specified by regulations issued by the CBI. 3. The provisions of paragraphs (1) and (2) shall not apply to: a. transactions with, or guaranteed by, the government; and b. transactions between banks with a maturity of one year or less. 4. For the purposes of applying this article or any regulations issued pursuant thereto, a person shall be deemed to include any other person with whom such person is connected, directly or indirectly, in such a way that the financial soundness of any of them may affect the financial soundness of the other or others, or the same factors may affect the financial soundness of some or all of them, or if as a result of the structure of their relationship the other person is in fact ultimately responsible for the credit outstanding.

 

http://www.cbi.iq/documents/banking_law_f.pdf

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I'm not sure what good it's going to do with depositing this money in the private banks without the amendment to these two articles.  Under the present law, article 27, the only way the private banks can make money is buy selling the dollar and accumulating the spread.  I understand that this will build the reserves of these banks, but still they are not allowed to lend for the transactions needed to build the private sector.  Something must have or be going to happen for this to have happened.  Things are getting very interesting  :) !

 

Article 27 Banking activities 1. A bank may engage in the following activities subject to the terms and conditions of its banking license or permit: a. receiving money deposits (in the form of demand deposits, time deposits or other types of deposit) or other repayable funds, bearing interest or not; -25 - ANNEX A b. extending credits (whether secured or not by collateral or liens), including without limitation: consumer and mortgage credit; factoring, with or without recourse; financing of commercial transactions, including forfaiting (purchasing negotiable instruments at discount without recourse); and financial leasing services; c. buying and selling for its own account or for the account of customers (including underwriting and brokerage services) of any of the following: money market instruments (including checks, bills of exchange, promissory notes and certificates of deposit); foreign currencies and precious metals; exchange and interest rate instruments; stocks and other transferable securities; and forward contracts, swap agreements, futures, options, and other derivatives relating to currencies, stocks, bonds, precious metals or interest rates; d. entering into contingent commitments, including guarantees and letters of credit, for its own account and for the account of customers; e. providing clearing, settlement and transfer services for money, securities, payment orders and payment instruments (including checks, credit, debit and other payment cards, travelers’ checks; and bank drafts, wire transfers, and pre-authorized debits and credits); f. money brokering; g. safekeeping and administration of valuables, including securities; h. providing trust services; i. providing services as portfolio manager of securities or as financial adviser, agent or consultant; j. providing financial information and credit reference services; and k. anything that shall be incidental to the foregoing and such other activities, not prohibited by Article 28, as the CBI may by regulation authorize as banking activities. 2. The CBI may, in its discretion, and subject to such conditions as it may stipulate, require banks to conduct certain banking activities through separately capitalized subsidiaries that are wholly or majority-owned by the relevant bank. Article 28 Prohibited activities No bank shall engage in or participate as an agent, partner or co-owner in wholesale or retail trade, manufacturing, transportation, agriculture or fisheries, mining, building, re-insurance, insurance underwriting or other business activities except for activities that are authorized by -26 - ANNEX A Article 27. Notwithstanding the foregoing, and with the prior written approval of the CBI, a bank may temporarily carry on or participate in the carrying on of such activities to the extent necessary to obtain satisfaction of claims, provided that the CBI may require the bank to cease such activities by a date specified in the license or permit.

 

http://www.cbi.iq/documents/banking_law_f.pdf

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I'm not sure what good it's going to do with depositing this money in the private banks without the amendment to these two articles.  Under the present law, article 27, the only way the private banks can make money is buy selling the dollar and accumulating the spread.  I understand that this will build the reserves of these banks, but still they are not allowed to lend for the transactions needed to build the private sector.  Something must have or be going to happen for this to have happened.  Things are getting very interesting  :) !

 

 

I like the way you laid it out, Skeet and I talked about this, he brought up the facts that payroll will force the people into using the banks, and then I also brought up the fact the delete zero project is in actually within the payment system and not monetary policy. Yota posted the article this morning I think, he also had 2 more articles within his thread.

Edited by newbieDA
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