The reforms announced by way of the primary bank of Iraq for the banking zone are the concern of extreme debate among professionals and experts over the feasibility of the reform criteria, which a few have defined as “unreasonable,” at the same time as banking officials keep they may be vital to defend the monetary system and depositors.
The crucial financial institution has set a fixed of standards requiring banks to increase their capital to four hundred billion Iraqi dinars earlier than the give up of subsequent year, a circulate aimed at improving monetary balance and enhancing the performance of the banking area.
but, these requirements have raised issues amongst economists, who accept as true with they could boom the pressures of the crisis on neighborhood banks, specifically in mild of declining investments and deteriorating monetary situations.
financial expert Mustafa Al-Faraj said, “The conditions imposed by the valuable financial institution are stringent and prohibitive, and do now not recall the difficult economic state of affairs going through Iraqi banks.”
Al-Faraj defined that realistic answers might were to provide direct assist from the principal financial institution via debt rescheduling and interest rate cuts, rather than tightening the measures.
For his element, Ahmed Brihi, a member of the crucial financial institution’s Board of administrators, emphasized that the standards set via the bank for reforming the banking area are neither stringent nor prohibitive. as a substitute, they goal to shield banks from crumble, ensure the protection of depositors’ price range, and keep Iraq’s global economic family members.
In a declaration to dinaropinions.com, Brihi said, “The banking reform requirements authorized by using the significant bank for private banks are not the stern measures being promoted, however instead vital steps aimed at making sure monetary balance and stopping banks from collapsing.”
He added, “a number of non-public banks confronted circumstances that disrupted their financial operations, requiring the vital bank to set up regulatory standards to shield them and depositors’ price range.”
He pointed out that “these standards also keep in mind the significance of preserving the crucial bank’s worldwide economic members of the family, which constitute a crucial factor in Iraq’s financial and monetary stability.”
This dispute comes as Iraqi authorities searching for to reform the financial region, which has been laid low with years of sanctions and political and economic turmoil.
Amid this controversy, the question stays approximately the ability of neighborhood banks to meet reform necessities, given the lack of clear monetary aid from the authorities and the ongoing financial disaster going through Iraq.
