Banking reform in the government curriculum
Monday 05 August 2019
In the fourth axis of the government curriculum (strengthening the economy), the government's time program for the government and private banking sector was set and the policy was drawn up to implement the following objectives:
developing the Iraqi banking system and enhancing the citizens' confidence in it;
transforming banks into their basic function of lending for development;
Loans and banking facilities that help in development lose their meaning as banks, which requires a specific position towards them from the central bank.
The government program has identified the importance of seeking to move from the paper currency economy to the symbolic and electronic currency economy and to withdraw funds from outside the banking cycle and introduce them into the system The banker.
Although the period of implementation of the government timetable is between 1 and 4 years, the Central Bank's strategy for the years (2016-2020) has achieved several goals of the government curriculum and has set the necessary policies and standards to achieve the objectives in stages.
Led to the assessment and classification of banks based on the achievement of planned objectives.
There are banks are moving towards the required development and banks still need an additional period of time to achieve targets and other faltering are now making extraordinary efforts of the central bank and the departments of these banks for rehabilitation.
What concerns us here is the real role of the banks in providing loans and banking facilities and moving from the role of banking to the developmental role.
There are two important observations that must be taken into consideration regarding the issue of loans and banking facilities to stimulate Economy.
First, the nature of the activities of banks depends on the nature of the activities of the economic sectors.
As long as the economic activity is concentrated in trade (imports), the activity of the banks remains concentrated on the external transfer and the related ones.
Therefore, unless the other sectors move the industry, agriculture, The banker.
It is worth noting that without control of imports, these sectors will not rise, which indicates that there is no progress on serious loans through the Bank's initiative Central.
And the other point requires the need to provide the legal environment and the extension of the rule of law to eliminate the phenomenon of default in repayment of loans and thus reluctance of banks to provide loans And facilities.