Iraqi Association of Islamic Banks Announces Support for Central Bank Measures in August 2024
In August 2024, the Iraqi Association of Islamic Banks (IAIB) announced its endorsement of the Central Bank of Iraq's (CBI) recent measures aimed at strengthening domestic liquidity management and developing an interbank market. The CBI's initiatives are part of a broader strategy to support the exchange rate peg by adopting more active domestic liquidity management.
Key Initiatives Supported by the IAIB
Domestic Liquidity Management and Interbank Market Development
The IAIB has expressed its full support for the CBI's efforts to enhance domestic liquidity management and establish an interbank market. The CBI has made significant progress since the initial technical assistance mission in March 2023, and the IAIB believes these measures will contribute to a more stable and resilient financial sector.
Digital Banking Regulations
The IAIB also supports the CBI's regulation of licensing for digital banks in Iraq, launched on March 28, 2024. The IAIB acknowledges that digital banking is revolutionizing the financial sector, offering convenience and innovation to customers, and emphasizes the importance of navigating complex regulatory frameworks.
Banking Supervision and Regulation
The IAIB endorses the CBI's enhanced supervisory reporting for Islamic banks and the capacity-building measures for supervisors. The CBI has provided a workshop to build the capacity of supervisors to effectively monitor, supervise, and regulate Domestic Systemically Important Banks (D-SIBs) and State-Owned Banks (SOBs).
Impact on the Banking Sector
These measures have contributed to a growing sense of stability and confidence in Iraq's banking sector. The CBI's increased capital and focus on conservative investment management have been seen as positive steps toward achieving stability in the sector.
Conclusion
The IAIB's support for the CBI's measures reflects a shared commitment to strengthening Iraq's financial infrastructure and promoting a stable banking environment. These initiatives are expected to contribute to the overall health and resilience of the banking sector, fostering growth and innovation in line with global standards.
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