Bankers: increasing the capital of banks, leading to an optimal investment
Mon 10/31/2011 9:12
Baghdad / economic-term follow-up
Bankers on the whole that the increase in banks' capital will help the Government to implement their investment projects by borrowing or credit. And confirmed by the Agency (news) that the local banks is still limited and the capital is able to contribute to the economic development of the country.
The deputy governor of the Central Bank of the appearance of Mohammed Saleh was an increase in the size of banks' capital will help the Government to implement their investment projects through loans, cash or credit card.
The added benefit is that the number of very large private banks amounted to more than (37) banks, but still limited financial activity is not only (10%) of the activity of the banking market in Iraq, the fact that the dominance of government banks in the spending of funds for the purpose of implementing the projects.
Saleh continued: government capital is very large and depends on oil revenues, which constitute the annual amounts of cash is very high, and continued, as was the capital of large banks as their ability to be the granting of loans and credit better.
And the benefit is that interest rate policy is the "double-edged sword," if the reduction will lead to the reluctance of the public to deposit their money in banks, if it has increased the cost may be to credit and development is very high, pointing to: there will be calls to reduce the benefits of the deposits to (zero) .
Meanwhile, a chairman of the Economy Bank Husam Obeid said that private banks private is able to contribute to the development and implementation of investment projects that the capital a few do not fit with the request for investment within the country as a result of these projects as they take a lot of money.
Obaid said: If the cost per project (250) billion dinars, the part of the banks did not reach the capital to (100) billion dinars, so do not be encouraged to contribute to the huge investments as a result of low stock prices for private banks.
Obaid, warned of the use of funds deposited by the citizens or the public to contribute to the country's investments and development processes are not considered as fixed capital for the banks because they are prone to withdraw at any time can not be disposed of.
And among the slaves: he may not legally rely on the amounts deposited increase banks' capital or meet the requirements of the banks, noting that the central bank is watching this situation and take part of the deposits and put a reserve of him, because it is not true that rely banks to raise capital on deposits. It is noteworthy that at the end of the year (2010), the number of banks operating in Iraq have arrived in (43) banks, including (7) state banks with a total capital of about (6036) billion Iraqi dinars, as well as (36) private banks with a total capital up to (202) trillion dinars.
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