Although the United States Treasury Department recently returned and informed it of the necessity to merge and close some of those banks, deciding their fate after numerous suspicions had been raised, the United States of America did not stop at punishing some Iraqi private banks by preventing them from participating in the currency auction held by the Central Bank of Iraq on a daily basis to sell the dollar.
Four Iraqi confidential banks were exposed to sanctions during the previous period, most strikingly the Center East Bank possessed by financial specialist Ali Ghulam, who showed up in Iraq on November 19, 2022 and was captured at Baghdad Worldwide Air terminal, in view of a capture warrant gave against him as per Article 456, and afterward delivered on bail.
Informed sources say, “The Iraqi designation that visited the US of America a couple of days prior, headed by Unfamiliar Pastor Fuad Hussein, National Bank Lead representative Ali Al-Alaq, and Head of the state’s Counselor Kazim Al-Hassani, examined with the US Depository and the Central bank the issue of limiting the dollar from Iraqi banks.”
That’s what the sources added “the US Central bank as of late mentioned from its Iraqi partner an arrangement to change the banks confined from utilizing the dollar, which incorporates shutting various them and laying out new banks through an alliance of various banks among themselves.”
She focused on that “the Bureaucratic Bank recommended to its Iraqi partner to look for the help of a global organization to introduce a wide change plan for the financial area, and before very long this organization will present its report on the financial area to the National Bank and the Iraqi government.”
That’s what the sources noticed “the Government Bank needs to decrease the quantity of Iraqi banks from 72 to under 40 banks during the ongoing stage.”
Prior to 2022, the US Treasury and Federal Reserve had imposed four stages of dollar access restrictions on 32 Iraqi private banks. The organizations limited from involving the dollar in Iraq additionally arrived at in excess of 250 organizations, most eminently “Fly Baghdad” Aircrafts.
In response, a banking official, who withheld his identity, stated that “the banking market has become monopolized by five banks, making it difficult for other banks to compete with them.” As a result, forming a coalition of five banks, one of which is a foreign bank, will help break the banking market monopoly and boost competition.
He emphasized, “Reforming restricted banks will be through restructuring them, beginning with changing ownership, employees, developing risk management departments, and combating money laundering and terrorist financing, among other things.”
The financial authority focuses on that “toward the finish of this current year, the National Bank of Iraq will drop the dollar move stage, and will depend on banks that have go-between banks. During the approaching month of September, a gathering will be held between the National Bank of Iraq and the Central bank in America, which will incorporate introducing the National Bank’s arrangement to change the area.”
In an effort to prevent the Iranian government and private sector businesses from using the dollar, the United States has begun limiting its access to some Iraqi banks that are suspected of leaking the currency.
For his part, economist Mustafa Akram Hantoush is of the opinion that “merging banks is a very excellent step, and will contribute to reducing the number of banks operating in the country.” Hantoush is a researcher in the field of economics. It is also necessary to close down banks that have been in trouble for years.
“The Central Bank of Iraq bears part of what happened in the Iraqi banking sector, because it is unable to confront the US Treasury or the Federal Reserve,” Hantoush asserts.
He brings up that “there are great banks that have been confined by the US of America, and the National Bank of Iraq should safeguard them and return them to work on the grounds that the Iraqi financial area is being slaughtered for unfamiliar banks.”
In November 2022, the US Depository agent met with delegates of 35 Iraqi confidential banks to caution them of issues of sneaking dollars from Iraq and sticking to directions in regards to hard money moves for import purposes, compromising them with sanctions in case of rebelliousness.
According to leaked information, the meeting lasted for two hours and was held without the Iraqi Central Bank present.
It is interesting to note that citizens who have lost faith in the banking sector in Iraq also neglect it. As per World Bank figures gave last year, just 23% of Iraqi families have a record in a monetary organization, which is quite possibly of the most minimal rate in the Middle Easterner world, particularly since the proprietors of these records are government workers whose compensations are conveyed to public banks toward the finish of every month. However, employees who prefer to withdraw their salaries in cash and keep them at home quickly form lines in front of banks, so these salaries also do not stay in the accounts for very long.