12 Banks excluded from CBI Currency Auction sale

Posted: October 26, 2013 in Iraqi Dinar/Politics

Central Bank exclude the 12 banks waged currency auction sale

 Baghdad / term

Saw experts and specialists in economic affairs that the central bank’s decision excluding the 12 banks waged from the auction sale of the currency and deprive it of cash sales, transfers and appropriations would open the door to the parallel market to emerge, and the decline of the real role of banks eligibility serious in the search for a partnership banking with major international banks.

while others questioned about the reason for increasing the capital of private banks and non-increase in the counterpart government despite the fact that the majority of government banks to exceed its capital of 100 billion dinars.

In this regard, said economic expert Majid picture that there is discrimination in dealings between private banks and government through consolidation of lack of confidence in the banking industry to the private sector, He explained that there are state banks less capital much about 250 billion Iraqi dinars.

between the Rafidain Bank, capitalized at 70 billion dinars with the reserve while the capital Rasheed Bank of 25 billion dinars, adding that some banks, other government not to exceed capital of two billion dinars.

stressed that the volume of deposits of private banks is disproportionate to dependence and therefore increase its capital must be under realistic policy to support private banks where you do not need all the banks because the capital of this size is constrained by the laws prevent them from doing business and direct investment. Indicating that the ايصح strikes harsh banks with high rating from the central bank through this procedure.

, and pointed out that any decision politically mother was economically will cause market instability and volatility in exchange rates, indicating that the central bank’s decision last in the exclusion of 12 banks waged from currency auction shares of the depreciation of the local currency against the dollar.

Meanwhile chancellor said the Finance Mazen dear, that the process of raising capital banks are not the best solution, because raising capital overwhelms shareholders often Vtsab benefit from this method.

pointing out that profits banks will decrease as a result of the capital increase because of the limited banking products derived from the paragraphs of the Banking Act. He believes that the issue of integration of banks with sheets weak financial is also a big mistake due to a variation in the ideas and boards of directors and private shareholders big, proposing a solution optimized to get to achieve the objectives of the banking sector through the formation of companies with foreign banks as a result its holdings of experience banks can acquire more voluntary, as well as the application of electronic systems destination correct.

while banking expert Muhannad Qassim al-Saadi said the Banking Act formulas quickly in the era of Bremer has been used terminology and labels curious about Iraqi law, where you do not know its meaning, as well as that this law does not meet the aspirations of the Iraqi banks because it is being the hands of Iraqi banks.

stressed Saadi on that in order to establish private commercial banking institution must have its own funds any shareholders’ funds, pointing to the need for non-state’s contribution to any part of the capital, noting that the general principle of this banking institution is a partnership and the partnership known as the law of Iraq agreement two or more persons to participate draft commercial and sharing results in a profit, then end make a profit, adding that the Banking Act, the current running of determining profits and specifically Article 28 of the Banking Act, which was preceded by Article 27, which identified a range of activities as possible that the exercise did not say all activities, but part of it.

He pointed out that Article 28 prevented the banks from exercising activities within the core of the banking business is investment, as well as prevent them from doing any activity that is not mentioned in Article 27, but after taking the approval of the Central Bank of surprise from the central bank when addressing to take the approval of the activity is not mentioned in Article 27, which reads as follows “It is prohibited to banks engage in any activity not mentioned in this article,” What made ​​us tied up in the vortex of the exercise of a particular aspect of the banking business and lack of exercise second aspect, a proposed solution is to modify the wording of Article 27 and the abolition of Article 28 whole by legal experts Iraqi bankers and managers of banks.

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