Foreign banks consider open branches in the country
Translation: Abdel Khalek on
From: New York Times
is still struggling to overcome the economic effects of war and armed
actions and political rifts and fragile security situation. For the
emerging banking sector, the challenges do not stop at the border.
to the official website of the Central Bank of Iraq, there are seven
banks in the country and 32 private banks and foreign banks, but
analysts say there are some State banks – particularly the Rafidain and
Rasheed – controls 90% of the banking business.
The name says
Khalil al-Salem, Executive Director of capital Bank in Jordan, who owns
72% of the National Bank of Iraq "the fact that General banks had been
given the opportunity to take advantage of the huge public sector funds,
it is natural that the marginalization of Iraqi private banks,
resulting in a loss of confidence by consumers who fear that the
collapse of private banks, the major challenge for the growth of private
The other says supporter makhlouf, Regional Director of
Middle East and North Africa operations of the International Finance
Corporation (World Bank unit that oversees the private sector) "there is
no level playing field in Iraq that most agencies and State
corporations – and staff – are restricted in their dealings with private
banks and deals only with General banks.
As a result, the private sector — consisting of almost 40 banks – very small and limited credit activity ".
public banks to access public funds the capital good, the private banks
should strive to get deals on infrastructure competition protector in
the manufacturing and construction sectors.
And compounding the
difficulties, the Central Bank two years ago, the law sets minimum
capital requirements for all Iraqi banks at $ 215 million, will be
implemented in June of this year.
Tawfiq tabbaa says co-director
at ivrshidz international law "there is a big issue concerning capital
adequacy in private banks and request the Central Bank raise capital
gradually, there may be significant among these banks merge, and maybe
some banks closed their doors, and was integrated into the banks or to
buy other banks.
If we add to this the costs of applying risk
management and measures to combat money laundering and the difficulty of
running native Bank in Iraq, the task looks daunting.
several foreign banks have expressed a recent interest in entering the
market in Iraq and pursue funding opportunities for projects in a
country that has a lot of untapped potential. Among the banks,
Bank chatrd, which gets 90 percent of its profits and revenues from
consumer banking services in Asia, Africa and the Middle East. In other
steps, the Bank plans to open three offices in Iraq.
The Bank's representative office in the northern Iraq city of Irbil.
order to expand the activities of its clients within Iraq, the Bank
introduced this year a request to the Central Bank of Iraq to obtain
licenses to expand library in Erbil to the branch and to open an Office
in Baghdad, followed by another branch in the southern city of Basra in
The Bank also plans to recruit an Executive Director in Baghdad to oversee its work in Iraq.