Strategy to enhance confidence in the banking sector, 14 JAN

Strategy to enhance confidence in the banking sector

On 23/6/2016, the Iraqi banking conference was held in Beirut under the title (Restoring Confidence in the Banking Sector) in the presence of the Governor of the Central Bank at that time, Mr. Ali Mohsen Al-Alaq, representatives of Iraqi private banks and branches of Arab banks in Iraq. The number of all Iraqi private banks was no more than 30 banks. The saving rate in the banking system was 23%, the hoarding rate of citizens was 77%, and the financial coverage rate reached 11%. The reasons for this were due to economic, financial and security challenges and shocks, the intertwing of policies, the lack of clarity of vision in making decisions for financial reform, despite all previous successive governments making efforts in this direction, but the desired reform was not achieved.

After 8 years, the Governor of the Central Bank announced at the periodic meeting of banking leaders two days ago that the Central Bank will adopt a strategy to enhance confidence in the banking sector, in conjunction with the strategies and plans that will be applied in 2024 on the steps of financial and banking reform, which is carried out with the support and joint cooperation with the government and support of the Prime Minister, where the expansion map has changed in the number of banks, and the number of banks has become 72 banks, and the financial coverage rate exceeded 33.5%, the number of open bank accounts and operating in banks is more than 10 million accounts, and the number of credit cards issued and in force is up to 18 million cards, and the digital transformation in the banking sector is moving in an accelerated direction towards the adoption of Modern banking techniques and comprehensive systems in addition to the establishment of the Iraqi company to guarantee deposits.

Therefore, the deposits, which guarantee the deposits of customers at that bank, are from the performance of its obligations towards them in accordance with the new amendment to its internal regulations. But lack of confidence is still prevalent within the culture of citizens in reluctance to deal with banks, and we believe that the reason that led to this is the troubled banks, the methods of some banks in dealing with the customer, the complex routine procedures, and the circumvent of some banks on the instructions of the Central Bank, which draws the mechanisms of transparent and proper dealing with citizens. Therefore, the new strategy to enhance confidence, as explained by the Governor on 11/1/2024, will depend on my meats:

First – Upgrading the level of banking services and products provided to customers.

Second – the bank’s availability of financial and its ability to meet customer requests at the time of the request without delay.

Third – The bank’s control and direct supervision focus on measuring the level of service provided by banks to customers.

Fourth – Providing external (international) confidence in the bank by enabling it to adhere to international standards and obtain confidence from correspondent banks.

V. Increase the capital of banks in the new date of 15/2/2024, the deadline for the increase.