Most of the Iraqi private banks have achieved the target level of capital

Most of the Iraqi private banks have achieved the target level of capital

Wednesday, June 15, 2011 00:00


"Said Abdul Aziz al-Hassoun Executive Director of the Association of Iraqi private banks on Tuesday that most private banks in Iraq and reached the level of capital set by the central bank - a $ 85 million - in order to diversify the activities of the financial sector.

Iraq is recovering gradually after years of war, sanctions and hoped that Iraqi banks lead multibillion-dollar deals with foreign companies to develop vast oil reserves to spur lending and revive the private financial institutions.

The central bank was prepared in 2009 a program of three phases to increase the capital of banks. The deadline for the first phase is the end of June, when banks have to be raised levels of capital to 100 billion Iraqi dinars ($ 85 million).

By June 2012 the banks must raise capital levels to 128 million dollars, while the level should be up to $ 213 million in the third phase, which ends in June 2013.

Hassoun said that 22 banks have achieved the target level of $ 85 million so far.

He added that three other banks in talks to merge to gain access to the required level.

He said in an interview with Reuters that private banks on the right track. He added that only seven banks did not increase its capital and they must justify it to the Central Bank.

And went on to say that the central bank may withdraw licenses of banks that do not meet the target level.

According to the website of the Central Bank on the Internet, there are seven state-owned banks in Iraq and 23 private banks, eight Islamic banks in particular.

Dominated by the Rafidain Bank and Rasheed Bank two governments on the Iraqi banking sector. And limited most of the activities of private banks for deposit services and there is limited activity for personal loans.

Hassoun said he personally agrees with the decision to increase capital so as to enhance the ability of financial entities to carry out banking operations monopolized by large state banks.

He added that the private banks also promote other services such as credit cards and ATMs. Do not provide these services are currently only eight private banks.

Ahmed said Albraihi deputy central bank governor told Reuters on Tuesday that it was important to increase the capital of private banks to boost their lending.

He added that such planning is to forecast the future of the Iraqi economy in reference to the huge growth expected in the oil and gas sector.


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