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Iraq is the first in the number of banks in the region ... and suspicions revolve around a file preventing it from being opened
Last updated Aug 31, 2020
Al-Mustaqila..A comparative study on the governmental and private banking sector in the Middle East showed that Iraq ranks first in the number of banks in the world, especially the private ones and those bearing the status of Islamic banks.
The study prepared by the Independent Press Agency showed that the number of banks in Iraq reached (81), including (8) governmental, (24) commercial, and (29) Islamic, in addition to (21) a foreign bank branch.
This percentage is the highest in the world compared to a number of countries in the region, as the number of banks in Turkey (43), Egypt (41), Saudi Arabia (31), Iran (30), Jordan (26), and Algeria (20) .. While The number of registered banks in a superpower such as Britain is (54) only.
Here, an important question can arise regarding the capital of Iraqi banks, whose performance is supposed to match the size of their commercial activity, which they must do, especially with regard to supporting various investment projects.
The study shows that the number of government banks is 8 and their registered capital amounted to 3,401,600,000,000 trillion Iraqi dinars.
While the number of Islamic banks reached 29 with a capital of 7,497,677,600,000 trillion Iraqi dinars.
As for the number of commercial banks, it reached 24 with a capital of 5,388,872,000,000 trillion Iraqi dinars.
And the number of branches of foreign banks operating in Iraq reached 21 with a capital, 749,281,129 billion Iraqi dinars.
As for the total capital of all banks operating in Iraq, it amounted to 17,182,455,590,080 trillion Iraqi dinars.
In light of these large numbers, we can repeat the question that imposes itself, what has the Iraqi banking sector achieved about the deteriorating economic situation in Iraq? And what is the role it plays within the policy of the Central Bank of Iraq, which is still continuing to grant licenses to open more banks?
The owner of a money transfer company based in Jordan, he told (Al-Mustaqilla) that he applied to establish an Islamic bank more than four years ago, but he was surprised by the amount of administrative obstacles, while it became clear after a period of his demand to pay an amount of $35 million in exchange for granting him the incorporation license.
Official data indicate that most of these banks, that not all of them participate in the currency auction held by the Central Bank of Iraq, and therefore the basis on which the profits of these banks are based is what they earn from hard currency distributed by the Central Bank in a strange way and according to the export certificates of many of them have become the focus of The ridicule of public opinion when revealed by the media.
The data also indicate that the amount of interest imposed by banks on loans granted to citizens is the highest in the region, as it amounts to 6% with an accumulated interest, which means that the citizen pays an additional interest amounting to half of the amount borrowed, while a smaller percentage of up to 2-3% is paid for the deposited sums. .
The information indicates that the process of opening an account in any bank is one of the burdensome bureaucratic processes for the citizen, which is practiced under the pretext of confronting money laundering and ensuring the sources of deposited funds, while the European Union has placed Iraq among the countries with high risks regarding money laundering and terrorist financing.
It seems that the central bank’s policies are tending to support these banks at the expense of the citizen who no longer trusts the nature of these banks’ work, thus prompting them to find outlets for additional profits, including housing the salaries of employees and retirees in these banks in ways that some describe as compulsory.
The matter that prompted a bank that is the largest in Iraq, the Rafidain Bank, to invite citizens to deposit their money in the bank’s branches in exchange for a commission (which was not specified in its statement on July 25, 2020) indicating that “many citizens are still hoarding their money in homes and it is useless and they have to benefit from moving this Funds in the banking sector and their attraction.”
While the well - known Iraqi journalist, Zaid Al-Hilli, pointed in an article to the method that these banks use to degrade the value of shares that citizens acquire through the stock market and claim losses, while their profits from the currency auction only amount to more than 6 billion dinars per year, wondering about the nature of the work of these banks Is there a real audit of its accounts and a statement of its profits?
And if we want to analyze the data of these banks, we will find that most of them support financing projects that belong mainly to the founders of these banks or their financiers, which means that the investment on which these banks are based depends on their founders or shareholders obtaining loans that they give themselves for the purpose of establishing projects that belong to them.
A member of the Parliamentary Economic and Investment Committee, Nada Shaker Jawdat, said in a press statement on 21-04-2019 that “some private banks have turned into a place of extortion and depletion of hard currency in the currency auction.”
She is surprised that “there are no real policies for the work of these banks to achieve maximum benefit from Banking work in construction, investment and reconstruction, as is the case in most countries of the world.
Jawdat added that "most countries in the world have private banks as a mainstay in the fields of reconstruction and investment in several sectors, but in Iraq we find banks far from these priorities and we do not find any benefit in the field of reconstruction in a strange policy that we find no explanation for by the responsible authorities." To follow up the work of those banks.
What can be reviewed here is the failed policy of the Iraqi Central Bank towards supporting banks through the hard currency auction at the expense of the economic situation in the country, and therefore the public treasury bears the price difference that goes in favor of the owners of private banks.
Researcher Shatha Khalil from the Economic Studies Unit at the Rawabet Center for Research and Strategic Studies indicates that Iraqi observers and officials estimate the value of what has been sold in the currency auction during the past fifteen years at more than $300 billion, most of which left Iraq to other countries without achieving A benefit for the Iraqi dinar and its value, which is still below the logical limit for the fifth largest oil producer in the world?
Thus, the currency auction became the official window for the waste of foreign currency in the country and for various forms of corruption.
Khalil stresses in her study that "the great corruption of the influential and controlling parties of some banks (corruption whales) do not make the real purpose of the currency auction to stabilize exchange rates and serve development, but rather this serves to finance their corruption, waste currency and destroy the Iraqi economy."
While a report published by The Independent Arabia on its website indicates that many observers accuse the Central Bank of running a "corruption balance" between the United States and Iran's allies in Iraq.
He referred to what was reported by "The New York Times" in a report about the possibility of "American complicity" in facilitating the work of the Central Bank, which was not a conversation that was heard for the first time in Iraq.
The American newspaper report states that "the US Treasury Department often turns a blind eye to money laundering operations taking place in Iraq."
The Independent report quotes economist Salam Sumaisem as saying, "Currency window controls do not have the necessary degrees of transparency to follow the country's actual need for import, and this raises major questions about the credibility of opening credits related to imports through the Ministry of Trade, and why the regulatory authorities do not track those operations."
"We do not know exactly what is the role of the money laundering department in the central bank in following up on these cases."
Sumaisem points out that one of the causes of the problem is that "banking leaders within the central bank and other considerations cannot be excluded."
The bank file in Iraq appears to be one of the thorny files around which a lot of suspicions hover, but it remains far from the media and supervisory authorities because of their interference with the political and influential authorities in the country, and therefore this file is one of the files that access is denied even as a matter of transparency required.
The answers remain in the inclusion of the Central Bank of Iraq.
To view a comparative study file on the number of banks in Iraq and some countries, here
https://drive.google.com/file/d/1TKuq5YGB27f6HVhTWQlz1woti7gFQ5mP/view
Iraq is the first in the number of banks in the region ... and suspicions revolve around a file preventing it from being opened
Last updated Aug 31, 2020
Al-Mustaqila..A comparative study on the governmental and private banking sector in the Middle East showed that Iraq ranks first in the number of banks in the world, especially the private ones and those bearing the status of Islamic banks.
The study prepared by the Independent Press Agency showed that the number of banks in Iraq reached (81), including (8) governmental, (24) commercial, and (29) Islamic, in addition to (21) a foreign bank branch.
This percentage is the highest in the world compared to a number of countries in the region, as the number of banks in Turkey (43), Egypt (41), Saudi Arabia (31), Iran (30), Jordan (26), and Algeria (20) .. While The number of registered banks in a superpower such as Britain is (54) only.
Here, an important question can arise regarding the capital of Iraqi banks, whose performance is supposed to match the size of their commercial activity, which they must do, especially with regard to supporting various investment projects.
The study shows that the number of government banks is 8 and their registered capital amounted to 3,401,600,000,000 trillion Iraqi dinars.
While the number of Islamic banks reached 29 with a capital of 7,497,677,600,000 trillion Iraqi dinars.
As for the number of commercial banks, it reached 24 with a capital of 5,388,872,000,000 trillion Iraqi dinars.
And the number of branches of foreign banks operating in Iraq reached 21 with a capital, 749,281,129 billion Iraqi dinars.
As for the total capital of all banks operating in Iraq, it amounted to 17,182,455,590,080 trillion Iraqi dinars.
In light of these large numbers, we can repeat the question that imposes itself, what has the Iraqi banking sector achieved about the deteriorating economic situation in Iraq? And what is the role it plays within the policy of the Central Bank of Iraq, which is still continuing to grant licenses to open more banks?
The owner of a money transfer company based in Jordan, he told (Al-Mustaqilla) that he applied to establish an Islamic bank more than four years ago, but he was surprised by the amount of administrative obstacles, while it became clear after a period of his demand to pay an amount of $35 million in exchange for granting him the incorporation license.
Official data indicate that most of these banks, that not all of them participate in the currency auction held by the Central Bank of Iraq, and therefore the basis on which the profits of these banks are based is what they earn from hard currency distributed by the Central Bank in a strange way and according to the export certificates of many of them have become the focus of The ridicule of public opinion when revealed by the media.
The data also indicate that the amount of interest imposed by banks on loans granted to citizens is the highest in the region, as it amounts to 6% with an accumulated interest, which means that the citizen pays an additional interest amounting to half of the amount borrowed, while a smaller percentage of up to 2-3% is paid for the deposited sums. .
The information indicates that the process of opening an account in any bank is one of the burdensome bureaucratic processes for the citizen, which is practiced under the pretext of confronting money laundering and ensuring the sources of deposited funds, while the European Union has placed Iraq among the countries with high risks regarding money laundering and terrorist financing.
It seems that the central bank’s policies are tending to support these banks at the expense of the citizen who no longer trusts the nature of these banks’ work, thus prompting them to find outlets for additional profits, including housing the salaries of employees and retirees in these banks in ways that some describe as compulsory.
The matter that prompted a bank that is the largest in Iraq, the Rafidain Bank, to invite citizens to deposit their money in the bank’s branches in exchange for a commission (which was not specified in its statement on July 25, 2020) indicating that “many citizens are still hoarding their money in homes and it is useless and they have to benefit from moving this Funds in the banking sector and their attraction.”
While the well - known Iraqi journalist, Zaid Al-Hilli, pointed in an article to the method that these banks use to degrade the value of shares that citizens acquire through the stock market and claim losses, while their profits from the currency auction only amount to more than 6 billion dinars per year, wondering about the nature of the work of these banks Is there a real audit of its accounts and a statement of its profits?
And if we want to analyze the data of these banks, we will find that most of them support financing projects that belong mainly to the founders of these banks or their financiers, which means that the investment on which these banks are based depends on their founders or shareholders obtaining loans that they give themselves for the purpose of establishing projects that belong to them.
A member of the Parliamentary Economic and Investment Committee, Nada Shaker Jawdat, said in a press statement on 21-04-2019 that “some private banks have turned into a place of extortion and depletion of hard currency in the currency auction.”
She is surprised that “there are no real policies for the work of these banks to achieve maximum benefit from Banking work in construction, investment and reconstruction, as is the case in most countries of the world.
Jawdat added that "most countries in the world have private banks as a mainstay in the fields of reconstruction and investment in several sectors, but in Iraq we find banks far from these priorities and we do not find any benefit in the field of reconstruction in a strange policy that we find no explanation for by the responsible authorities." To follow up the work of those banks.
What can be reviewed here is the failed policy of the Iraqi Central Bank towards supporting banks through the hard currency auction at the expense of the economic situation in the country, and therefore the public treasury bears the price difference that goes in favor of the owners of private banks.
Researcher Shatha Khalil from the Economic Studies Unit at the Rawabet Center for Research and Strategic Studies indicates that Iraqi observers and officials estimate the value of what has been sold in the currency auction during the past fifteen years at more than $300 billion, most of which left Iraq to other countries without achieving A benefit for the Iraqi dinar and its value, which is still below the logical limit for the fifth largest oil producer in the world?
Thus, the currency auction became the official window for the waste of foreign currency in the country and for various forms of corruption.
Khalil stresses in her study that "the great corruption of the influential and controlling parties of some banks (corruption whales) do not make the real purpose of the currency auction to stabilize exchange rates and serve development, but rather this serves to finance their corruption, waste currency and destroy the Iraqi economy."
While a report published by The Independent Arabia on its website indicates that many observers accuse the Central Bank of running a "corruption balance" between the United States and Iran's allies in Iraq.
He referred to what was reported by "The New York Times" in a report about the possibility of "American complicity" in facilitating the work of the Central Bank, which was not a conversation that was heard for the first time in Iraq.
The American newspaper report states that "the US Treasury Department often turns a blind eye to money laundering operations taking place in Iraq."
The Independent report quotes economist Salam Sumaisem as saying, "Currency window controls do not have the necessary degrees of transparency to follow the country's actual need for import, and this raises major questions about the credibility of opening credits related to imports through the Ministry of Trade, and why the regulatory authorities do not track those operations."
"We do not know exactly what is the role of the money laundering department in the central bank in following up on these cases."
Sumaisem points out that one of the causes of the problem is that "banking leaders within the central bank and other considerations cannot be excluded."
The bank file in Iraq appears to be one of the thorny files around which a lot of suspicions hover, but it remains far from the media and supervisory authorities because of their interference with the political and influential authorities in the country, and therefore this file is one of the files that access is denied even as a matter of transparency required.
The answers remain in the inclusion of the Central Bank of Iraq.
To view a comparative study file on the number of banks in Iraq and some countries, here
https://drive.google.com/file/d/1TKuq5YGB27f6HVhTWQlz1woti7gFQ5mP/view
