Iraqi banks dealing with America attract deposits

[size=52]Iraqi banks dealing with America attract deposits[/size]

[size=45]An unofficial Iraqi financial report showed a clear decline in the percentage of private sector deposits held by 12 local banks in the country, compared to recent years, confirming that banks that have dealings with other American banks have acquired the largest percentage of private sector deposits in Iraq.[/size]
[size=45]For several months, the Central Bank of Iraq has been seeking to expand the scope of electronic financial transactions in the country, through private and government banks, while granting new privileges to depositors as part of a broad reform program that aims in part to address American concerns about the leakage of the dollar to US-sanctioned entities, represented by Iran, the Syrian regime, and the Lebanese Hezbollah.
A report by the Iraq Future Foundation for Economic Studies and Consultations (non-governmental) stated that three local banks have correspondent transactions with other American banks, which acquired nearly half of the deposits of the Iraqi private banking sector in the first half of 2024.[/size]
[size=45]Private sector deposits
The report, issued last Thursday, added that the three banks acquired 47% of the total private sector deposits in Iraqi banks and private banks, after their acquisition of deposits in 2019 was only 34%.
According to the report, “Iraqi banks that do not have correspondent American banks, their acquisition of private sector deposits in the middle of this year reached 36%, after their acquisition of deposits in 2019 was 42%.
The institution expected in its report that the deposits of the three banks, most of whose shares are owned by foreign institutions, will increase and reach an acquisition rate exceeding 50% of public deposits by the end of 2024.
Earlier, the Central Bank of Iraq announced that licensed banks in Iraq would rely on correspondent banks for external transfer operations.[/size]
[size=45]Reasons for the decline of banks
Experts believe that the decline in deposits has a direct impact on the nature of the monetary and financial trading system, in addition to the loss of customer confidence in private banks that do not have international transactions represented by participation with correspondent banks.
In his interview with “Al-Araby Al-Jadeed”, banking expert Abdul Rahman Al-Shaikhli said that the state of loss of confidence between banking institutions and their customers and the decline in private sector deposits have many reasons, including the risks of corruption.
Al-Shaikhli considered that the three banks’ acquisition of the majority of the value of deposits is due to the fact that they have an American intermediary and are safe and reliable for depositors, unlike other banks.
He added that “reputation risks are one of the most important criteria for evaluating banks,” wondering, “How can we if the risks come from corruption that eliminates mutual trust between the depositor and the bank?”
He pointed out that corruption greatly affects the size of the cash mass deposited with banks, because there are banks that cannot provide the necessary liquidity to their customers when needed in the same volume and time required.[/size]
[size=45]The suffering of traders
In the context, Ahmed Al-Fahd, a member of the Federation of Chambers of Commerce in Baghdad, commented on the procedures of Iraqi banks and their dealings with traders, which led to a decline in private sector deposits with them.[/size]
[size=45]Al-Fahd told Al-Araby Al-Jadeed that traders and workers in the Iraqi private sector suffer from the procedures for financial transfers via the electronic platform for officially registered traders, which go through complicated and sometimes humiliating procedures.[/size]
[size=45]He stressed that the banks' procedures for completing the financial transfer requirements are very long and sometimes take 10 days, indicating that most financial transfers have been rejected and others have been blocked by financial auditing companies without knowing the reasons for the rejection or blocking.[/size]
[size=45]Al-Fahd pointed out that most traders and workers in the private sector have turned to cash transactions, direct deposits, and opening credits and bank accounts with international banks to facilitate their financial transfers for import purposes. He
explained that the majority of Iraqi traders work in accordance with the law and instructions of the Central Bank of Iraq, and do not deal with countries banned by the US Treasury, calling for the need to improve banking dealings with traders and facilitate financial deposit procedures for financial transfer purposes.[/size]
[size=45][You must be registered and logged in to see this link.]