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What is the benefit of merging the 3 oldest banks in Iraq?
Thursday, 01-04-2024, PM 7:13 Karar Al-Assadi 454
Nearly nine decades after their founding, the “Agricultural,” “Industrial,” and “Real Estate” banks are facing a government decision to merge them.
What specialists consider a positive step, due to the
decline in their level,
people’s confidence in them, and
their inability to finance projects of economic interest., despite having large deposits.
Economist Nabil Al-Marsoumi says,
“The decision to merge the industrial, agricultural, and real estate banks is part of the banking and financial reform, given that the banking sector is outside the development process,
although it has large deposits, but it is unable to finance large projects with economic returns, especially the Rafidain Bank.” And Al-Rashid, who are considered very backward, and
countries currently measure their progress by the progress of their banking sector.” Al-Marsoumi adds,
“Red tape, bureaucracy, and sluggish work also led to weak people’s confidence in the banking sector, and caused 90 percent of the country’s monetary mass to be outside the banks,” indicating that
“regarding the banks mentioned in the merger decision, they do not exist now in the world.”
Specialized banks, or even comprehensive banks, receive deposits and finance projects, whether real estate, industrial, or agricultural, and this is a good step, in order to rebuild the banking sector and integrate it with the course of the Iraqi economy.” He points out that
"this decision will not weaken the capacity of these banks.
On the contrary, it will give them a strong impetus and greater financing capacity than before."
In its session yesterday, Tuesday, the Council of Ministers approved direct contracting with Ernst & Young, to
study the issue of restructuring the Rafidain and Rasheed banks,
submit its recommendations regarding them, and
propose a road map in this regard, within 6 months, and
direct contracting from the Industrial Bank with Ernst & Young. Young, to
study the issue of merging industrial, real estate, and agricultural banks into one bank with one of its specialized experts.
He also agreed to contract with the aforementioned company, to study the issue of merging the National Insurance Company with the Iraqi Insurance Company, into one company with its experts and specialists.
The Iraqi banking system went through several stages starting in 1867.
The oldest known bank in Iraq was the Ottoman Bank, then the Iranian Shahshah Bank and the British Oriental Bank.
Then the Iraqi national banking stage began in 1935, which witnessed the establishment of the Industrial Agricultural Bank, which split after 1940 into two banks.
They are: the Agricultural Bank and the Industrial Bank, and then in 1948, the Real Estate Bank was established and its main purpose was to finance the purchase of houses by individuals.
In 1941, the Rafidain Bank was established, which is the only commercial bank in Iraq, and
in 1947 the Central Bank of Iraq was established under the name “The National Bank of Iraq.”
For his part, banking expert Mahmoud Dagher explains,
“The Cabinet’s decision regarding merging banks is good and its timing is also appropriate, as
these banks still have low capital and merging them as a first stage is the best.” He points out that
“Ernst Young is considered one of the top four companies in the world in accounting and auditing, and has previous work in Iraq and knows the nature of its challenges well, and
the country depends on it in
auditing and reviewing operations,
identifying existing gaps and finding the right ways to merge or acquire, and
it will play an important role in Liquidating the balance sheets of these banks, merging them, and indicating the size of assets and liabilities.” He notes that
"government institutions are always captive to instructions and routine, and
they need support and development.
The best and safest solution for Iraq is to transfer them to the private sector in the future,
and end the role of institutions that burden the state."
According to the Central Bank of Iraq website,
Iraq includes 80 operating banks,
including 62 local banks and
18 banks that are branches of foreign banks.
It is noteworthy that the Iraqi banking sector is neglected by citizens who have lost confidence in it, and
according to World Bank figures issued last year, only 23 percent of Iraqi families have an account in a financial institution, which is a percentage among the lowest in the Arab world,
especially since the owners of those Accountants are state employees whose salaries are distributed to public banks at the end of each month, but
these salaries also do not remain in the accounts for long, as
queues quickly form in front of banks from employees who withdraw their salaries in cash and prefer to keep them at home.
In addition, economic expert Hammam Al-Shamaa explains,
“The Council of Ministers’ decision to assign Ernst Young to restructure the Rafidain and Al-Rashid banks is to study the problems and defects occurring in their work and propose a new structure, most likely to transform them into large private banks, and perhaps re-merge them into one bank.” He confirms,
“With regard to real estate, industrial, and agricultural banks, they will also be subject to study by the company in charge, which will present suggestions and recommendations for merger,” indicating that
“these banks are lagging behind and have entered themselves into mazes, due to
their failure to adapt to banking changes around the world and
their failure to take appropriate measures in economic crises, which has led to It led to the loss of their capital, and
they do not have strategic plans to keep pace with economic data,
so this is a good step to find effective solutions for these banks.”
It is noteworthy that the current banking system is in a state of great confusion due to the attempt to control dollar smuggling, in addition to the accusations of corruption and smuggling that have affected many banks, including the government. It is noteworthy that
Washington entered into the crisis of dollar smuggling last year, and
Iraq was subjected to the global SWIFT system, which
created a gap between the parallel and official market, and
increased the loss of confidence in Iraqi banks, as
dozens were subjected to American and Iraqi sanctions without processing depositors’ funds, in addition to the
involvement of... Most banks are currently engaged in smuggling operations, according to what the US Treasury Department confirmed.
https://www.non14.net/public/163269
Thursday, 01-04-2024, PM 7:13 Karar Al-Assadi 454
Nearly nine decades after their founding, the “Agricultural,” “Industrial,” and “Real Estate” banks are facing a government decision to merge them.
What specialists consider a positive step, due to the
decline in their level,
people’s confidence in them, and
their inability to finance projects of economic interest., despite having large deposits.
Economist Nabil Al-Marsoumi says,
“The decision to merge the industrial, agricultural, and real estate banks is part of the banking and financial reform, given that the banking sector is outside the development process,
although it has large deposits, but it is unable to finance large projects with economic returns, especially the Rafidain Bank.” And Al-Rashid, who are considered very backward, and
countries currently measure their progress by the progress of their banking sector.” Al-Marsoumi adds,
“Red tape, bureaucracy, and sluggish work also led to weak people’s confidence in the banking sector, and caused 90 percent of the country’s monetary mass to be outside the banks,” indicating that
“regarding the banks mentioned in the merger decision, they do not exist now in the world.”
Specialized banks, or even comprehensive banks, receive deposits and finance projects, whether real estate, industrial, or agricultural, and this is a good step, in order to rebuild the banking sector and integrate it with the course of the Iraqi economy.” He points out that
"this decision will not weaken the capacity of these banks.
On the contrary, it will give them a strong impetus and greater financing capacity than before."
In its session yesterday, Tuesday, the Council of Ministers approved direct contracting with Ernst & Young, to
study the issue of restructuring the Rafidain and Rasheed banks,
submit its recommendations regarding them, and
propose a road map in this regard, within 6 months, and
direct contracting from the Industrial Bank with Ernst & Young. Young, to
study the issue of merging industrial, real estate, and agricultural banks into one bank with one of its specialized experts.
He also agreed to contract with the aforementioned company, to study the issue of merging the National Insurance Company with the Iraqi Insurance Company, into one company with its experts and specialists.
The Iraqi banking system went through several stages starting in 1867.
The oldest known bank in Iraq was the Ottoman Bank, then the Iranian Shahshah Bank and the British Oriental Bank.
Then the Iraqi national banking stage began in 1935, which witnessed the establishment of the Industrial Agricultural Bank, which split after 1940 into two banks.
They are: the Agricultural Bank and the Industrial Bank, and then in 1948, the Real Estate Bank was established and its main purpose was to finance the purchase of houses by individuals.
In 1941, the Rafidain Bank was established, which is the only commercial bank in Iraq, and
in 1947 the Central Bank of Iraq was established under the name “The National Bank of Iraq.”
For his part, banking expert Mahmoud Dagher explains,
“The Cabinet’s decision regarding merging banks is good and its timing is also appropriate, as
these banks still have low capital and merging them as a first stage is the best.” He points out that
“Ernst Young is considered one of the top four companies in the world in accounting and auditing, and has previous work in Iraq and knows the nature of its challenges well, and
the country depends on it in
auditing and reviewing operations,
identifying existing gaps and finding the right ways to merge or acquire, and
it will play an important role in Liquidating the balance sheets of these banks, merging them, and indicating the size of assets and liabilities.” He notes that
"government institutions are always captive to instructions and routine, and
they need support and development.
The best and safest solution for Iraq is to transfer them to the private sector in the future,
and end the role of institutions that burden the state."
According to the Central Bank of Iraq website,
Iraq includes 80 operating banks,
including 62 local banks and
18 banks that are branches of foreign banks.
It is noteworthy that the Iraqi banking sector is neglected by citizens who have lost confidence in it, and
according to World Bank figures issued last year, only 23 percent of Iraqi families have an account in a financial institution, which is a percentage among the lowest in the Arab world,
especially since the owners of those Accountants are state employees whose salaries are distributed to public banks at the end of each month, but
these salaries also do not remain in the accounts for long, as
queues quickly form in front of banks from employees who withdraw their salaries in cash and prefer to keep them at home.
In addition, economic expert Hammam Al-Shamaa explains,
“The Council of Ministers’ decision to assign Ernst Young to restructure the Rafidain and Al-Rashid banks is to study the problems and defects occurring in their work and propose a new structure, most likely to transform them into large private banks, and perhaps re-merge them into one bank.” He confirms,
“With regard to real estate, industrial, and agricultural banks, they will also be subject to study by the company in charge, which will present suggestions and recommendations for merger,” indicating that
“these banks are lagging behind and have entered themselves into mazes, due to
their failure to adapt to banking changes around the world and
their failure to take appropriate measures in economic crises, which has led to It led to the loss of their capital, and
they do not have strategic plans to keep pace with economic data,
so this is a good step to find effective solutions for these banks.”
It is noteworthy that the current banking system is in a state of great confusion due to the attempt to control dollar smuggling, in addition to the accusations of corruption and smuggling that have affected many banks, including the government. It is noteworthy that
Washington entered into the crisis of dollar smuggling last year, and
Iraq was subjected to the global SWIFT system, which
created a gap between the parallel and official market, and
increased the loss of confidence in Iraqi banks, as
dozens were subjected to American and Iraqi sanctions without processing depositors’ funds, in addition to the
involvement of... Most banks are currently engaged in smuggling operations, according to what the US Treasury Department confirmed.
https://www.non14.net/public/163269
