Banking experts calling for the rehabilitation of government banks

They demanded the establishment of the company to protect the deposits of depositors and guarantee the rights of Baghdad, the new morning: The member of the Iraqi Council of Representatives, Dr. Mahdi Al-Hafiz to look for effective solutions to the reality of the banking sector, especially private banks in Iraq because the economic development of Aandzha but advanced banking system. This came during a seminar hosted by the «Institute of the progress of the policies of development» to discuss the relationship between private banks and the Central Bank Iraqi and participated in the seminar group of money experts and economists and representatives of the private banks.

He said Hafiz censorship, which is supposed central bank carried out is still weak and confused to great limits.

He pointed out that the process of dollar selling by the central bank is a sensitive issue for the citizen, as is supposed to prevail The process of converting amounts routine and easy manner as is prevalent in other countries.

stressing the lack of separation between what exists in the banking sector transactions and the Central Bank and the corruption case in the state.

He pointed out that the decisions and orientations after 2003 was different from what it is today was There is agreement about enabling the central bank to play a new role.

As eating banking expert conciliator Hassan Mahmoud through the paper presented at the symposium and the reality of the banking sector in the country and ways to promote it.
indicating that this sector is a small sector marginal does not exceed its contribution to the gross domestic product of 1.5% and if we add to him the financial sector increase to 1.75% and is facing the problem of State-owned banks dominate the ranges between 85-90% of the sector's assets, which hinders the development of private banks.

He explained that the annual report for financial stability for 2013 indicates that the sector's assets have reached the end of the year A total of 208.8 trillion dinars, or about 77.4% of GDP, which is estimated by the same report estimated 269.6 trillion dinars government banks share of which amounted to 187.7 trillion dinars, or slightly less than 90% in the private sector's share stood at 21, 1 trillion only, about 10% only.

pointing to the meager credit relative to GDP, amounting to the cash credit of all banks in 2013 amounted to $ 23.6 trillion dinars, an increase of no more than 8.7% (5) of the gross domestic product in 2013 compared to 55% of the countries of the Middle East and North Africa have government banks share of which amounted to 72% while the share of the sector funds headers are only 19.5% also own the rest banks contributed to a 28% despite the fact that its share of the gross domestic product in 2013 compared to 55% for countries in the Middle East and North Africa have amounted to government banks share is 72% while the share of the sector funds headers are only 19.5% also own the balance being banks contributed to a 28% despite the fact that its share of the sector funds capital amounting to 80.5%

pointed Mahmoud to a large disparity between both rates, credit and debit Interest rates on deposits ranging between 1-6% depending on the currencies and maturities ranging in interest rates on loans and banking facilities of all kinds between 10-15%, leaving a margin of about 9%, compared with only 5% in the Middle East and North Africa .. That disparity between the credit interest rates and the city background historic began with deflationary monetary policy adopted by the central bank to combat the sharp inflation experienced by Iraq in the period 2006- 2010, which resorted to activate the traditional instruments of monetary policy by raising policy rates to high levels close to 20% per annum and raise Interest on the night and weekly deposit rates and monthly banks has what Atrah between 18-20% .. as well as raising the deposit reserve to 20% instead of 15%.

He said Mahmoud to the existence of another problem facing the banking sector is faintly capital and other sources of funding, as still funds operating in Iraq banks heads together do not meet the needs of development, the number of operating banks is 54 banks, including (7) state banks (30) private banks, including 23 commercial banks and (7) Islamic banks, the branches of foreign banks Fddha ( 17) branches.

The central bank has put limits on minimum capital operating in Iraq banks Reducing the minimum capital Bank of Iraq of non-government banks include up to 250 billion dinars, and the branches of foreign banks have started a minimum of 7 million dollars and then raise this recently to 70 million dollars.

He said Mahmoud said the total deposits with commercial banks stood at the end of 2013 amounted to 49.8 trillion dinars, equivalent to 18.5% of GDP, of which 40.5 trillion the government banks any 81.3% and the rest is a 9.3 trillion to the private banks which only 18.7% of total deposits, and this variation is due to the dominance of state-owned banks on government deposits after that prevented the Ministry of Finance government departments and institutions to maintain accounts or deposits with private banks, but what concerns us here is the distribution of these deposits between government banks and the private banks and that the total private sector deposits with the banking system for 2013 amounted to 24.45 trillion dinars, of which the share of government banks 14.61 trillion dinars, or 59.8%, while private banks received 9.83 trillion dinars, an increase of only 40.2% of private sector deposits. .
said Mahmoud to the small number of banking units compared to the number of population (bank density) as the number of branches totaled 1 030 branches as at the end of 2013, the branch per serving about 32 000 people.

He stressed Mahmoud on the causes of the banking sector fails to current Bhacleth due to a number of reasons, including weakness and confusion in quite a few of the instructions issued by the Central Bank from time to time and then the other and then not soon be withdrawn or amends after a few days.

as well as a decline in banking supervision efficiency and professionalism, but lack of seriousness. And that these methods control the banks have not kept pace with the evolution of central banks in developed countries and in neighboring countries, including preventive censorship.

Add to a lack of the banking system to the required governance rules to monitor the performance of boards of directors and executive departments and verification of compliance with laws, regulations and instructions .. and the lack of sector of the culture of banking risks and means of evaluation and management and ways to mitigate or reduce them.

Add to this the emergence of the boards of directors and departments of a bank is a professional not related to nor experience nor knowledge of banking work and have no qualifications is owning a sudden financial fortunes hovering suspicions about their sources.

He Mahmoud to a lack of the banking system of governance rules required to monitor the performance of boards of directors and executive departments and verification of compliance with laws, regulations and instructions.

noting that despite the existence of multiple points of control talk about irregularities and corruption if begun will not end up showing that among these bodies Central Bank of Iraq - the Directorate General of banking and credit control as a regulator of the activity of banks .alajhzh competent oversight and budget analysis at the Securities Commission -balnsph banks listed on the market Audit Court, which verified the government banks accounts to the Audit Committee of the Council of Administration Almsrv- accounts compliance officer - the external auditor in each bank - oversight services and internal inspection of each bank .

Mowaffaq al-Hassan and talked about selling the dollar by the Central Bank of Iraq window indicating that it thorny issue relate mainly to the functions of the Iraqi Central Bank monetary stability is no stability of the dinar exchange rate against foreign currencies is one of the most important duties, and this arduous and thorny task at the same time in a matter of Kalzerv prevailing in Iraq . Iraqi Vdinar debt to the central bank and the right of the dinar bearer of this to ask the central bank disbursed the equivalent of dollars, but that this right should not be automatically and without accountability there is no doubt that Responsibility for verifying compliance with anti-money laundering law is Responsibility for each of the Bank Central and commercial banks alike, but is the responsibility of various related economic security government agencies. Indicating that the other face to satisfy the demand for the dollar is the depletion of foreign reserves .. calling for a return to the manner of letters of credit to finance imports and to stop the style of bank transfers that can not be on commercial banks Central Bank of knowledge sources Dnanerha while retaining the manner of remittances to pay Akiem some food commodities perishables such as meat, poultry, vegetables and fruits that are issued to Iraq by about periodic agreements with importers deadlines for the payment of more or less (60-90 days) .. but he also said this does not preclude meeting the requests remittances personal and family legitimate and enhanced documentation supports their legitimacy. This matter is achieved through the return to work vacations import issued by the Ministry of Commerce to be part of the documents open Credits import claimed by the importer to be this holiday only for statistical purposes without quantitative restrictions to prevent them from becoming another source of corruption and that customs departments more careful and higher be professional in the framework of matching commercial lists attached documents reliance with import license in terms of description of the goods and quantity has turned out after checking a lot of these documents lack authenticity of documents provided to the banks on the allegedly written by circles customs Lama rigging and corruption in circles customs itself or rigging the outside .. and subdue the appropriation of more than a certain amount, let us say 250 000 dollars, for example, to examine the goods by the company closer supported in the port of export pre-loaded on a ship or aircraft .. and coordination between the Council of Ministers and the Central Bank to agree on a minimum balance foreign currencies held by the latter to enough to cover imports for a number of months.
And ways to the advancement of the banking business .. Mahmoud called for raising the efficiency and professionalism of the Superintendency of Banks of strengthening the central bank's capabilities in both sides of the balance sheets of banks and testing effort analysis and commitment controls «Basel» hand and tighten controls on banks regimes banking and instructions restrict the other hand .. The tightening of sanctions on offending banks to the instructions and escalate their frequency in the event of bank failure to arrange conditions to conform with the regulations and instructions.

Indicating that the commercial interest rate charged by banks, prices do not encourage borrowing for investment purposes and it must be find a way to support interest rates through the use of reserve deposits held by the central bank to bank lending interest rate and not 1% per year, for example, that the banks lend to small and medium enterprises prices developmental benefit of 4-5% .. The second step require political will capable to take drastic action and initiate laws which will eventually lead to a move away state from interfering in the domestic banking from it and the international activity through the privatization of all of the bank «Iraq» and «rational« and the liquidation of Trade Bank of Iraq in accordance with Bakannouna in the specified time frame, according to his rights and obligations.

pointing out that the privatization of banks The three government can contribute contribution is little to reduce the large budget deficit.

referring to the lack of a feature and advantage of dealing with these banks are not the only advantage of the protection offered to the owners of deposits from the household sector and the business sector that this is what justifies its dominance of the private sector deposits it acquires 59.8% of private sector deposits (current and saving and fixed) with private banks are not only (40.2%) of those with deposits. But this protection will be provided by the Deposit Insurance Corporation as is the case in the rest of the world when it found the law the way to the legislation.

For his part, economic expert, Dr. Ahmed Alabreha occur indicating that the banking sector file in Iraq is one of the thorny issues .. After 1984 the world went to the principle of ease controls on financial institutions and continued it so, up to the recent global financial crisis and found that they sinned in ease of control and they discovered that the biggest financial institutions exceeded on the bases and standards and rules of nice behavior through the files of corruption that took place there

and the Alabreha that one of the most important aspects of failure in Iraq are the government's inability to enforce the law and therefore, all witnessed by Iraq of sacrifices for freedom and democracy after 2003 as a result of the weakness of the law and the inability to impose the international reports free of classified Iraq as part of countries that enjoy democracy.

He stressed that the central bank alone is unable to censorship and assess the level of performance of the banks, this task is much greater than the bank whose primary responsibility is the ability is to put fiscal policy, a non-banking supervision and the development of controls and anti-money laundering and operations of central banking

and pointed Alabreha that the Superintendency of Banks is the task was added to the functions of the bank which is not a banking cash and as a policy Mixing a clear policy have occurred in the task led to disastrous results .. censorship needs to destinations has clout and the ability to strike with an iron fist .. He pointed out that the United Nations has recently introduced a circuit called the Union for the integrity or the fight against corruption.

The corruption here means the agent for an authentic betrayal .. The government agent and the people Thoroughbred .. and there is a new theory that the Iraqi the term (I Halih) This principle is the basis of corruption, and there are 80 international initiative to combat corruption, including not to deal with bribery issue is not cursing the government but is required from citizens not to pay a bribe to the employee or borrowing from the bank and it does not meet the loan.

to Dr occur appearance of Mohammed Saleh financial advisor to the Prime Minister.

Indicating that the banking market is not homogenous, there are attracting clear of capital and deposits by government banks, which account for 90 per cent and 10 per cent for private banks and there is a disparity in the capital. . He explained that the government banks in Iraq late and private banks operate according to the nineteenth century Systems ..

Saleh explained that the percentage of adults who get a credit of 12 per cent and with each failure of banking transaction because of tripping is withdrawn 32 treatment Banks civil very conservative with non-government banks conservative and this is evident through the large loans granted by government banks size .. The point is fundamental in banking operations illegal loan ratio rises them to 40 per cent and the meaning of this wake of the banking system is prevalent in Iraq evidenced by interest rise to up to 100 per cent and this is usury.

Saleh said the governance absent in the banking sector and of withholding data on what others result in negative governance or bad and there is a serious thing in Iraq, which is being conducted outside the budget, a domestic trade of creating centers of profit separately and the loss of any work to maximize profits personal connection goes little to the institution and this point is extremely dangerous ..

He spoke in favor of all auction file currency returned him an important and necessary, but can you take the creation of a bank to the private sector be of his duties the opening credits of the centrality and are gradually shift to cover imports.
In the framework of the discussions that took place symposium Mr. Tariq secretary occur private banks association for the outcomes of the banking conference organized by the Association recently indicating that the conference recommended strengthening and developing cooperation with the Central Bank of Iraq and the formation of a joint committee of the Central Bank and Ministry of Finance and the Association of Banks and members of the economic and financial for the development of the banking reality and strengthen cooperation with government agencies to support private banks as well from carrying out an awareness campaign about the role of banks in the development and the designation of a representative of the Association as an adviser in the Council of the Iraqi Central Bank administration

economic expert on behalf of Jamil Antoine expressed his appreciation for large bolder in subtraction and solve the problems out of courtesy.

He called for a review of prices of bank stocks ..

He added that the system banking and because of tremors suffered and withdraw large sums from banks and some of it was not the level of responsibility led to the shake citizen confidence in these banks, there are 77 per cent of the Iraqi currency outside banks, even if this size is, we could finance the budget in Iraqi dinars, as well as the dollar deficit and this was the result of an approach wrong for banks and lack of monitoring and follow-up and the role of registered negative companies.

referring to the issue of the lack of governance and absence of legislation in this regard and must reconsider these standards.

stressing the need to activate the control procedures by the central bank away from the courtesies.

Participants in the symposium and called for the risks facing treatment banks, including the amounts deposited with the bank (Rafidain and Rasheed) in Arbil and Sulaymaniyah reached the limits of 7 trillion dinars and the inability of branches for the disbursement of these deposits to the lack of cash is needed to address this problem.

They also called for the formation of a real committee representative from the Central Bank and others the task of putting solutions and treatments For all the problems that have been put forward and be in front of this committee one month to issue its report without that this report be binding but is an attempt to resolve

Dr. Ali high called to address the problem of lack of liquidity in banks and why occur such a problem do you because of weak oversight or a lack of legislative action.

What he asked also for guardianship experience Was it successful over the Warka Bank to reassure the Iraqi citizen to moving towards these banks?

legal expert Osama Mohammed Ali pointed out that economic development in the country requires hard work and put the right man in the right place.

He pointed out some of the private banks which exceeded regulations and laws without taking the measures required right .. calling for the application of prudential standards and issue instructions required and the need to issue sanctions against violators as well as the development of an institution meant to protect the rights of depositors.
Banking expert Samir Alnasiri warned of the collapse of the banking system in Iraq soon if they are not addressing the problems faced by and through This year, the collapse means the collapse of the economy.

Indicating that the results of research, studies and indicators do not always get the attention .. evidence that the five largest banks in Iraq saw a decline in the volume of deposits also dropped coins and operating, credit and capital investment and profits realized all declined as well as lower assets and this is a serious indicators of the top five banks How the case for other banks.

adding that in the absence of addressing the issue of liquidity Bmsrvi Rafidain and Rasheed in the region.

He called for the preparation of a new economic approach government appointed in addressing the reality of large and disastrous problem banks in the light of the financial crisis faced by Iraq

economic researcher and media, Dr. Hamid Ulkipaia between to talk about the privatization of State-owned banks in light of the lack of trust by the Iraqi citizen banks

civil., indicating that the weakness of this trust paying customers to trend towards government banks because people know that the government will not go bankrupt, it has a viable and therefore, the privatization of the bank Rafidain and Rasheed means to inflict these banks which enjoys the confidence of people in banks civil lost its confidence. People put their deposits in these banks and then not getting it.

He pointed out that privatization might be appropriate but then provide conditions appropriate and the environment that have not yet ripened banking sector need to organize

Ulkipaia called to encourage the banking integration policy The country does not need to 50 banks as much need for an active and influential and able to meet the development and investment requirements of the banking sector as is the case in advanced countries such as Britain.

banking expert Abdul Aziz Hassoun, said the banking system that exists today is the result of the system is known and this system is not he can succeed is this device .. Indicating that the deposits constitute less than a quarter of deposits in Lebanon Where are we and where to finance the Iraqi banking system which is required to support development.

adding that this device remains linked to the situation existing can not be the emergence of a non-existent now.

economic expert, Dr. Abdullah al-Bandar pointed out that the banking system and the economy go hand in hand Whenever the economy was developed was the banking sector advanced and vice versa .. When we speak of a multiplier credit, the Iraqi economy in this area underdeveloped and can not produce our banking sector developed .. begins economy development when it starts banking development deal and handles the public trust with banks and dealing instruments and reducing the proportion of compactness at home .. He pointed out al-Bandar, the difficulty of separation between the private and public banks in the Iraqi political environment as the problem of corruption rampant between Monday and cover this corruption by political parties evidence that large amounts of money marked by the granting of loans to sectors of the non-productive in the absence of the private sector .. even five trillion loan provided by the central bank to the private sector Ciecoppe corruption a capacity size of the loan, with the disappearance of Iraqi industries.. He pointed to the private sector subsisted on central bank sales of the currency, this stop the auction, it will stop.

Banking expert Mohamed Saleh Chandler stressed that the banking density is not important in Iraq or estimated on the basis of need because of the deteriorating banking services and lack of ability of banks to fulfill their obligations .. indicating that the central bank today is going through the most vulnerable cases is through his inability to control and monitor the performance of private banks and violation financial standards and regulations.