Private banks are working with capitals slim

Author: Yasser incumbent

03/08/2016 0:00

BAGHDAD - Imad emirate

between economic academic d. Awad Fadhil Ismail, said the failure of commercial banks to attract financial surpluses of the private sector explains the preference of savers government depository institutions on those special and this can be given to two reasons : the lack of protection for depositors in private banks in exchange warranty on deposits in state banks.

He stressed in an interview for »Sabah »the need for legislative action to establish a foundation or fund meant to guarantee private deposits at private banks to achieve parity with government - owned banks and equal ability to compete in terms of modern private commercial banks and the lack of public adopt to deal with it.

He said that the predominance of savings deposits with government banks do not reflect excellence the innovative quality of the banking transaction that provided to its customers as much as reflecting a sense of psychological and financial services may not be entirely justified, embodied by the fear of the loss of the money deposited with the Aadaih institutions do not provide a system to hedge against the loss of savings in case the integrity of its financial position to market and operational risks.

He the most prominent reasons for the control of government banks on more than 88 percent of the deposits of the commercial banking system to the restrictions imposed by the government and its ministries and public institutions on their operations with private banks.

He said Ismail said economic activity overall mainly depends on government business fueled by oil resource, the financing of these business leads, through the channel of the state budget, to the accumulation of government funds with its banks, which means that the change in government revenue is reflected mostly in the central bank 's balance sheet liabilities of First in State - owned banks budget liabilities when the government financed its administrative expenses and operational development, more than from bank deposits which in turn raises their liquidity, and as long as the cash position of a strong government because of its reliance on huge oil revenues, the effects of internal financing government spending must be hurt in the end are cash deposits to the state of the banking system.

He continued, marked by savings deposits in the structure of the banking mediation devices phenomena first rule of a clear government banks on the overall savings deposits in terms of the total deposits, savings and fixed deposits in state banks amounted to 42 trillion dinars in 2010 at a rate of 88 percent of the total volume of deposits in savings and then rose to 53 percent trillion dinars in 2012 at a rate of 86 percent compared to that share of private commercial banks was only 11 percent of all savings deposits in the commercial banking system in 2010 and 2012 respectively.

he Ismail that the strange thing is that despite the dominance of the surpluses van state - owned banks operating heads very little money compared to their counterparts own means that state - owned banks take advantage of others have deposited funds, especially government fiscal surplus in its run.

He pointed out that the second phenomenon is the lack of success of private banks in the flow of cash surpluses towards the liabilities issued by and is reflected in the decline in deposits ongoing public savings and fixed has indications compared with those deposited in state banks.

He said that the deposits of fixed savings are still low compared to the total deposits of the sector Special to the civil depository institutions, current deposits has occupied for 64 Palmihaam 2010 and then rose to 65 percent in 2012 counterpart to that proportion of savings deposits and fixed from 35 percent down to 34 percent to the total savings deposits for the same period.

he continued, third indicator is that the banks State trading acquires greater part of savings deposits fixed for the private sector deposited with the commercial banking system increased by 71 percent, 70 percent, 67 percent match 28 percent 0.29 percent 0.32 percent over the past 2010.2012, 2011 , sequencers, and index the fourth decline in total deposits savings own attributed to the gross domestic product among private commercial banks compared to their counterparts in the state - owned commercial banks has reached the 3, 2.3 percent among private banks.

He went on , fifth indicator reinforced the weakness of private commercial banks ' liabilities sensitive to overall economic activity through the low percentage of savings deposits to local production .