Iraq Private Banks Complain About Bank Regulation New Restrictions
|May 28, 2011||Filled under Featured Article|
The majority of private banks in Iraq affirmed on Tuesday that Iraq’s bank regulation allows public banks to monopolize the banking process especially after imposing new restrictions that require from private banks to raise their capital funds to 250 Billion Iraqi Dinar by the end of 2013.
While private banks caution that this decision would paralyze the private bank sector, Iraq’s central bank deem the decision as necessary to preserve Iraqi funds deposited in these banks.
“Certain private banks are facing difficulties to implement new restrictions of increasing capitals within three years until 2013 from 100 to 250 billion Iraqi Dinar”, expert Abbas Al Sudani at Al Shamal private bank told Alsumarianews.
“New restrictions that include as well merging private banks with other banks impede the banking process and hinder the development and upgrade of these banks”, Al Sudani said.
The acting director of Al Warkaa’ private bank Mohammed Al Samerraie told Alsumarianews that private banks are labeled by virtue of the bank regulation Article 28 as investment and finance banks, however, they are prevented from investing, he said.
“Since 2009, the Finance Ministry did not change its view regarding private banks. The Ministry tries not to deal with them. It only calls to deal with public banks which it provide with money supply knowing that public banks are incapable of following up development”, Al Samerraie added.
Central Bank advisor Mothahar Mohammed Saleh said despite the negative impact of government decisions on private banks, they are deemed necessary to protect public funds from looting mainly that there are government deposits in these banks. 37 out of 45 private banks mark failures, he told Alsumarianews.
Iraq had adjourned the restructuring program of Iraq’s finances system till 2013. The program included the restructuring of two Iraqi major public banks namely Al Rashid and Al Rafidain in addition to the monitoring directorate at the central bank and the development of the private banking sector.
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