Finance and Central Bank encircled private sector banks in Iraq

[PPG]

17/05/2011 0:00

The future of Iraq / Ghaith Al-Fayad

Criticized the Associate Director of the Federation of Iraqi private banks Emad Alkbjee demands of the Central Bank of Iraq that Iraqi private banks raise their capital to five times, and cut the time frame not exceeding three years, starting next month, describing the resolution Baltjeezi. He said Alkbjee "The demand for the Central Bank of Iraq aimed to increase the capital of banks, contrary to the policy of the Ministry of Finance directed and since more than two years, government departments and ministries not to deal with instruments and transfers of private banks, non-acceptance of letters of guarantee issued by private banks in a move that reduced the profits of private Iraqi banks and limited their dealings and undone by the customer confidence Bmassarva, which is undoubtedly limit the activity of banks and thus prevents them from raising their capital. "

The number of Iraqi private banks 35 banks with a capital of more than two billion dollars, but they are obliged now to apply the decision of the Iraqi Central Bank to increase the capital to become a 250 billion Iraqi dinars, the equivalent of $ 214 million U.S. on three stages, for a period of three years only.

The number of owners of private banks for resentment of the above decision and described it as aimed at restricting and impeding the activities of private Iraqi banks that Asmaht effective in advancing the local economy, while the stresses involved need banks to develop their capital to strengthen its funding and lending, and wonder about the feasibility of tightening bank Central Bank to increase capital at the time of receding space of the labor market because of security and political conditions in the country.

Director of the Bank of the Middle sector to invest, Nabih Moussa said that "the procedures issued between now and then Ministry of Finance of Iraq, and requests from government ministries and departments not to deal with private banks and their branches, is only the procedures for determining and hamper private sector activity, and recently began ministries refused to receive instruments of banking certified by the clients not be issued by state banks which is the prejudice the right of private banks, which spent after 2003 to the time the current deal with the Iraqi market and bore the brunt of the security risks and Rphit local economy Iraqi money and provided him with the savings and contributed to investments, and now is said to have easily Stop work with the largest sector in the country, a government sector. "

Central Bank in turn issued an evaluation of the private banks, was based on the annual reports and budgets, and monitored by the Field Audit Department, calling for the ministries and institutions dealing with the inventory of the 27 banks covered by the calendar.

Banks Union, the Iraqi government refused to coping mechanisms contradictory treated accordingly private banks. Assistant to the President of the Union Emad Alkbjee pointed to the lack of harmony between the Finance Ministry by the Central Bank of the other, and the difference their policies, which affected the work of private banks, which doubled during the past years, capital of the times, which is now called upon to double their capital for five times during the years of three which is far from the logic somewhat according to Alkbjee, who said that "the great contradiction between monetary policy and fiscal policy in the country affected the overall functioning of the economy in Iraq, and caused major problems have included increased rates of inflation and the measures the central bank to reduce and procedures of the Ministry of Finance, which exacerbated in some times of inflation. Finally, the Resolutions of Finance to stop dealing with private banks and the decision of the central raised private capital sinks civil came mismatched either to launch a financial deal with private banks discreet and either give up the Central decision and extend the roof to increase capital of private banks for a period of more. "

The level of transactions of private banks has fallen recently as Acherth stats (Center for Economic Studies of Iraq) by 16% would suggest the reasons to reject the government departments dealing with private banks and vouchers, instruments, letters of guarantee issued by it, note that the number of customers has dropped so they turned to the government banks to put deposits and Erhnoa where their money is transferred instead of private banks that limited their activities to the lending and banking facilities are forced to raise interest rates on deposit in its different forms to allow them to compensate for its losses.

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[FRUSTRATED]

Please,can someone smarter than I am translate the rate they are talking about here? 250 billion to 214 million. Sure looks like the Dinar is not worth very much!!! Thanks in advance for any help you may have! Steve

[kinglizzy99]

Please,can someone smarter than I am translate the rate they are talking about here? 250 billion to 214 million. Sure looks like the Dinar is not worth very much!!! Thanks in advance for any help you may have! Steve

That's just the current conversion...take $214M and multiply by 1170 (the current program rate for $1 USD)...comes out to around $250B...we're not going to see a smoking gun (such as an RV rate of whatever) in these articles...

[HYDRANT]

THANKS PPG