The contribution of the private banking sector in the implementation of private sector development s

The contribution of the private banking sector in the implementation of private sector development strategy requirements



2017/04/11 | 00:21
(Encyclopedia of this day , news | News Iraq ) -
Special / NeniraQ

The private banking sector in Iraq , a newly established Astnadaly Law No. 12 of 1991 and that the number of private banks now is 43 Iraqi commercial bank and an Islamic and the number of branches in the provinces up to 525 branches in addition to 5 branches outside Iraq , in addition to the 17 branches of the Bank of Arab and foreign.

And that the financial results and statements for the years 2014 and 2015 underscores the trillion total assets of the private banking sector 22 Denarockl 10 per cent of total assets Compared Government banks and deposits constitute 14 percent of the total deposits of cash and credit constituted by 21 Balmayh of the total cash credit, making its contribution to the gross domestic product is very weak it does not exceed 7 percent, so the goals of the strategic development of the private sector for the years (2014-2030) is to raise the contribution of the private sector to all economic sectors, including the banking sector to (35-50) percent of gross domestic product and run Atala Work and reducing the rate of unemployment to less than 6 Balmaih.ubma that the banking sector is a ring of financing and investment to stimulate the session of the Economic and Development and the development of sectors Alaguetsadba industrial and agricultural productivity, transportation and tourism sectors such.

The third axis of the government program for the current government (to encourage the shift to the private sector) and in particular paragraph (d) which sets out the steps banking development which confirmed on private banks to contribute to the financing of productive private sector, and this has not been achieved in the past two years due to the challenges and Ajhttha banks for the following reasons : -



First topic: the challenges and problems and constraints of the banking sector:

First: The special security conditions because of the war on terror and the occupation of some provinces of Daesh terrorist gangs and theft of customers' deposits in the branches of government and private banks in those provinces and the destruction of documents that guarantee owed banks the rights of borrowers and which are currently classified according to the indicative list issued by the Central Bank's debt can not be repaid, realistically due to the displacement of most of the borrowers of their provinces and their inability to payment in addition to increasing the risk ratios in the cash grant credit to customers, which confounded the work of banks and reflected



On liquidity limits, which led it in some banks

To lower its borders, which will display some of them into bankruptcy and financial collapse in addition to that it will lead to influence the economic situation and financial and investment activity during the current phase.



Second, the suffering of the Iraqi banking sector and in particular private banks in all areas of banking activity from government militancy and weak support for them



Third, the continued weakness of credit extended contribution to output

So that GDP does not exceed 10% , while in regional countries (Middle East and North Africa , up to 55%) . This means that the impact of the Iraqi banking sector in economic development and rebuilding the national economy , according to a look to serve the orientation of the market economy.

The current lack of liquidity in banks helps in the continuation of this problem , which is the inability to cash grant credit to customers and investment projects in various economic sectors





Fourth, the lack of financial institutions retaining the banking business as a deposit guarantee and credit guarantee companies and the lack of specialized offices to study and analyze and identify risks (credit, liquidity, market and operating) Although it diagnosed several years ago.

Fifth: the inability of the Iraqi banking sector from acquiring the capabilities and potentials and infrastructure technical and technical influential in investment portfolio management and catch up in the footsteps of the banking development in neighboring countries, making the customer look at our banks look backward and unable to provide the best advanced services to him, which led to their reluctance to deal with the Iraqi banking sector and in particular the private banks.



Sixth: the existence of a parallel sector is represented by registered Cashiers large operations are ARD who (internal or external remittances, banking, cash transfer) are made outside the formal framework.

Seventh: the complex tax laws that are not commensurate with the support and economic reform policies that must be provided by the government to the banking sector.

Eighth: customers resulting from debt owed ranged between less than 35 billion dinars for each bank two years ago banks could not be retrieved from what has become a debt that can not be obtained in accordance with the indicative list.

Ninth: The weakness Thaghzubain- some banks faltering led to their withdrawal of deposits from banks at higher rates than normal rates, and not filing any new funds, which led to a decline in liquidity in these banks to limits the minimum prescribed by the Central Bank .mma make it can not to fulfill its obligations.



Tenth: -ankhvdt deposits in these banks increased by 30-70 percent, which these banks were forced to stop its credit and investment.

Eleven-Aagaf some correspondent banks correspondent banks to deal with some banks, as happened with the German bank Commerzbank Commerzbank, which suspended its external banking (documentary credits and foreign remittances).

Twelfth: Because of the economic recession in the country's financial crisis and the stifling share prices in the trading market in the Iraq Stock Exchange and the arrival of the shares of these banks fell to less than the nominal share price by 85 percent.

XIII: Limited development of financial systems in Iraq and the central policies in determining interest rates, which was reflected in the non-payment of loans and thus to restrict the ability of banks to finance new loans, which led to slow growth and the emergence of serious calls for restructuring and reform of the banking sector.



The second topic: the banking reform proposals strategy.



In order to overcome the challenges of the private banking sector and activate its contribution to the implementation of the private sector strategy requires Mayati: -

1-develop a new methodology for banking reform in Iraq, re-adoption of the institutional and structural construction of the banking sector in terms of policies, mechanisms and procedures.



2-coordination between fiscal and monetary policies.



3. reconsider the legislative environment in which they regulate the economic and banking work. This includes Guanyin central bank, banks and Iraq market for securities and registration of companies and investment.

4. Development of small and medium enterprises institutions through the organization of funding for these projects by the banking sector.



5-structured reconsider Almsrgi funding.



6-restore confidence in the private banking sector and increase the savings ratio of the mass of cash at the expense of the proportion of compactness at home.



7. address the lack of liquidity in private banks.

Samir Abbas Nasiri / Iraqi Special Advisor to the Association of Banks

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