October 31, 2011
Bankers: Bank capital increase will lead to optimal investment
Bankers were unanimous that more capital banks will help the Government to implement investment projects by borrowing or credit.
They (News Agency news) that local banks still capital limited and unable to contribute to the country's economic development processes.
Deputy Central Bank Governor Mohamed Saleh, in appearance if you increase the size of capital banks will help the Government to implement investment projects through loans, cash or credit.
Added benefit: the number of very large private banks totalled more than (37) banks, but still limited financial activity is not only (10%) Banking market activity in Iraq that the dominance of State-owned banks in spending funds for project implementation.
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He continued: the State capital is too large and depends on the annual oil revenues which are very high amounts of cash, and continued: whenever substantial banks capital whenever their credit loans.
And between valid: that the interest rate policy was "a double-edged sword" if they are reduced to the reluctance of the public will deposit their money in banks and where was increased the cost of credit and development is too high, noting: there are calls to reduce interest on deposits to (zero).
The Chairman of the Board of Directors of the Bank said the economy Hussam Ebeid special private banks unable to contribute to the development and implementation of investment projects that few capital investments don't fit within the country as a result of these projects because they take money.
Obeid said: If the cost per project (250) billion dinars, the part of banks have yet to reach the capital to 100 billion dinars, so there is no encouragement to contribute to the massive investments as a result of low stock prices for private banks.
Obeid warned of the use of funds deposited by citizens or the general public to contribute to the country's investments and development processes are not considered fixed capital for banks because they are subject to withdrawal at any time you cannot dispose of them.
And among slaves: it may not be legally rely on deposits with banks capital increase or meet the requirements of banks, adding that the Central Bank is watching this case and take part of deposits and put in reserve, so it's not true that banks adopt to increase capital on deposits.
Recalled that at the end of the year (2010), the number of banks operating in Iraq arrived (43), banks (7) Government banks total capital towards (6021) billion Iraqi dinars, as well as 36 private banks with total capital of up to (202) trillion dinars.
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