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The World Bank is helping Iraq in restructuring its banks

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The World Bank is helping Iraq in restructuring its banks

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Economy news/agencies.

Financial advisor to the Iraqi Prime Minister Mohammad Saleh appearance of strong political will on the Iraqi Government to restructure State banks, formed a Committee headed by the Governor of the Central Bank on the relationship, and there is a Subcommittee to follow up the issue of restructuring started working with the World Bank, which gave us a road map of 4 stages.

And noted during a seminar held by the Institute for development policy progress», «the will between the blocks to restructure banks,

the first stage of the plan audit of banks and a
second to prepare balanced, one clean and realistic, while the
third step is management governance through supporting banks with international experts to create a homogeneous banking market, the
fourth step is to restructure the capital Rafidain and Rasheed, this phase must be completed within 18 months.

He stressed the need for a legal restructuring "visions of banking and restoring banks and give power to the boards, entitles banks engage in the banking market.

Said: «banking sector consists of 7 large banks enjoys 91 percent of bank assets and about 86 percent of the deposits of the banking system, and this formation in government deposits reached 65 trillion dinars (about 55 billion dollars) until the end of 2015, 45 trillion of government deposits and 19 trillion of deposits, including 10 trillion dinars to the good Bank and Mesopotamia, 9 trillions in private banks».

Good said that «capital and reserves asset budget sound of 2 percent only, and match the global context for the shape and look like our banks live modern globalization.

Private banks still living conditions of 19th century».

He explained that the Government's sovereign bond liquidity "State banks, which means that investments are in Government funds itself through the Treasury transfers, so the proportion of capital investments to 34 percent, cash credit amounting to 36 trillion dinars, 29 trillion in State banks go to firms borrowed or formula for State employees' salaries or other ancestor, this amounts to about 50 percent either remaining 50 have excess liquidity, as in the good bank where Nearly 80 percent, which means he loses, there are 7 trillion in private banks».

He pointed out that "the problem is that the government borrows funds for lack of valid system shows the direction and use government money flows».

And spoke in favour of good governance for the management of ownership and accountability and transparency, and these cannot be realized easily because the mechanism is intact, what led to disable the boards due to the intervention ministries in banks».

Former Planning Minister Mehdi Al-Hafez that trailed the Iraqi banking sector level is a big dilemma must be addressed by those concerned with economic reform.

He explained that the World Bank has issued an important report years ago upon the recommendation of the Ministry of finance and the Central Bank, the financial situation in Iraq, and showed that the banking situation is the weakest link in Iraq».

He said: «the report recommended restructuring and ensuring equal treatment of public and private banks, and regret not taking any actions or handlers to restructure banks, even under State program file not found a clear vision to reconsider putting banks and enable them to support the private sector».

The head of the Iraqi national action Council «» Dawood Abd ROAR that «the last announced budget Rafidain reported 125 trillion dinars, a fantastical than the State budget, and we all know that this number is inaccurate.

He explained that «there is mistrust and doubts about the banks, and therefore you should not implicate the new departments of these problems and has to stop work pending scrutiny of international company», noting that 77 percent of local currency outside the banking system, this is a death certificate for the Iraqi banking system because the rest is government deposits».

ROAR stressed that «corruption begin to enter the local currency to the banking system, called «electronic dinar issued by the Rafidain and Rashid banks or governmental levies, it will help us to achieve significant qualitative leap in banking policy».

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date added 02/08/2016-10:20 last updated 02/08/2016-10:20 content number 4613

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