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Banks restructuring experience breaks in ancient institutions and experts fear the results

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Banks restructuring experience breaks in ancient institutions and experts fear the results

Economy    Breaking    Rafidain Bank    Central Bank of Iraq    Rasheed Bank    White Paper

10/18/2021 01:13

Twilight News / after the decision of the Ministry of Finance to take a package of reform measures related to the restructuring of the Rafidain Bank, which is one of the most prestigious and oldest institutions of the Iraqi state, and

after years of pressure and demands of the International Monetary Fund to re-state banks restructuring the Iraqi and make it more in line with the economy, said

some specialists fiscal policy economic and that this step is necessary to develop the work of banks in Iraq,

but some have expressed the same reservations of these actions may not be well thought out.

Restructuring of the state's prestige

He says professor of economics at the University of Iraqi Abdul Rahman al-Mashhadani told Twilight News Agency; "The restructuring of banks must be in accordance with the market economy mechanism, such as other banks and the Rafidain Bank operates according to this mechanism, and returns set by even higher than commercial banks,

but we want to separate the board of directors from the Ministry of Finance and have an independent authority financial decision," noting that

"the decisions of government banks are currently subject to the authority of the minister and therefore, in each budget when putting funding deficit, the bonds are sold and forced to Rafidain and Rasheed Iraqi trade because these banks belonged to them."

He noted Mashhadani; That "restructuring should not have to go by that turn the bank into the private sector or transferred to the part of the private sector," pointing out that

"Iraq has the commercial banks were not active during the past period note it girl its capital from the government because they Aatacht on the foreign currency auction did not enter development during the past period and did not work to raise funds from the public for use in the development of investment projects, and even they did not want to enter it because it may be an element of risk with few profits so the subject Astshluwa bank auction."

The al-Mashhadani said, "Rafidain Bank and Rasheed part of the prestige of the state and Tossa since the beginning of the establishment of the Iraqi state, and therefore must be returned in that do not turn to the private sector," adding that

"the Iraqi Trade Bank more modern and works in accordance with the techniques and technology, and thus the Rafidain Bank can be pursuing the same techniques and technology this bank has and be a source of public funds to attract and work on the basis of genuine competition and not only actual."

The displacement of thousands of employees

Says economist Jalil al-Lami, an expert in an interview told Twilight News that "the action taken by the government is a procedure is incorrect because it will lead to the displacement of thousands of employees and thousands of families will be harmed," noting that

"this matter, which will also include the Rasheed Bank that it was better for the ministry to create an internal borrowing new bank complies with the Corporate governance manual issued by the bank and issuing instructions appropriate with the current reality with the country, especially with regard to credit. "

He adds that "the new Board of Directors chapter to be formed from outside the bank for the management of the bank's main is a dangerous procedure because banking secrets would be jeopardized," he said, adding that

"it was the best ministry comprehensive system activation and adoption of the company's discreet rather than relying on the Jordanian company, which has proved its failure in Iraq and reduce the branches inside Iraq, especially near each other and develop a charter and private and to keep the leased branches and the opening of branches in important countries have a commercial deal with them as is the case with Turkey and China."

Out of the classic template

Says economist Durgham Mohammad Ali in an interview told Twilight News that "what was done by the Ministry of Finance of measures to restructure the Rafidain Bank may seem positive and promotes the inclusion of Iraq's system of banking within the advanced banking systems Arab and out of the Rafidain Bank of classic Qalbh and activate the role of credit and services banking if they vocabulary reform is correct."

Points out that "the separation of the Board of Directors on the Bank's management will strengthen the oversight role of the performance of public administration and branches provided that the mechanisms and transparent governance for the selection of the board of directors and enjoys real autonomy rather than partisan dependency."

The question Muhammad Ali in "financial ability to restructure the bank as required as the face of the white paper vocabulary repair damage and reality and the complexity of the scene of the Iraqi economic."

To the World

For his part, the financial expert Mohamed Miller in an interview told Twilight News that "Rafidain Bank, an ancient institution, and accounts for most of the deposits, most of which are government, but it is still lagging behind compared to global banks and technology," he said, adding that

"it is time to develop its banking system and to be able to enter the global banking market."

He adds that "the bank was placed under Central Bank supervision will give the bank a strong boost to start showing bank credit diversified to what is owned by the Central Bank of great experience in this field,"

explaining that "the importance of the restructuring of these banks and the development of advanced systems fit with the size of the development reached by countries the developed world in this area."

Rafidain Bank was established by Law No. (33) for the year 1941 and started operations on 19/5/1941 with a paid-up capital of (50) fifty thousand dinars, and has a number of bank branches currently 164 branches in Iraq, in addition to (7) branches abroad, namely: Cairo, Beirut, Abu Dhabi, Bahrain, Sana'a, Amman, Jabal Amman.

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