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State-owned banks do not offer the guarantees necessary
On: Sun 01/29/2012 19:41
Because the survival of Iraq under Chapter VII
Citizen - the follow-up
Iraq developed a mixed banks involving government and private banks and foreign, to unite their capital to cover the guarantees in excess of one billion dollar barrier roofs. The move comes as the inability to meet the local banks to cover the financial guarantees required by the investment companies, which represent the problem of restricting the entry of specialized companies in the electricity sector, infrastructure and services.
A spokesman for the Ministry of Electricity Musab al-secret teacher's «life», that «the ministry can not deal with these banks, whether government or private and even foreign financial guarantees in the matter of Iraqi Trade Bank with the exception of the largest state in terms of capital». He continued: «the problem of the limited potential of the private banks are still, even government banks can not provide these guarantees for reasons to keep Iraq under Chapter VII».
He added: «all foreign companies that contract with the ministries, the very large sums ask us to put bank guarantee covering the amount and this is what our banks can not afford, since the capital is only a small percentage of the amount of the contract». He stressed that the government coordinate with the «Commercial Bank» in order to overcome the red tape to the implementation of projects and the Ministry of Electricity.
The Cabinet decided to allocate funds annually to support the private sector, and the establishment of a joint venture to secure loans and purchase of dubious collected, to encourage lending in the future, as well as for approving the establishment of Bank of mixed contribute to the government and private banks and branches of foreign banks, with a capital of an appropriate and adopt the foundations of international banking modern .
Source in the «Union of Banks» Iraq stressed that «all the private banks because they refuse to integrate family banks are not financial institutions in its true sense». The central bank has committed all the private banks to increase their capital to 250 billion dinars (200 million dollars), which reduced the solutions available to them to limited integrate with each other or to share with a foreign bank.
The Vice Governor of Central Bank of Iraq for the appearance of Mohammed, that the establishment of this bank will be a link between the mixed state and market, and that the government contracts with foreign companies continues through a series of guarantees, a solution to the problem of limited financial capacity of local banks. He denied the intervention of the Central Bank to give guarantees, noting that the new law banning the procedure, indicating that the limited activity of the bank to conduct monetary policy.
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