The Central Bank continues the actual implementation of banking reform plans, 9 OCT

  The Central Bank continues the actual implementation of banking reform plans

Based on the decision of the Council of Ministers to approve the National Strategy for Bank Lending in Iraq on 8/18/2024, which was launched by the Central Bank on 5/25/2024, the Supreme Executive Committee for the Strategy began its work and held its first meeting headed by the Governor of the Central Bank, which is a clear announcement of the beginning of the actual phase of implementing its strategies for banking reform, which includes what is stated in its third strategy, the national strategy for lending, environmental and social standards, and corporate governance for banks.

And draw a clear roadmap in agreement with the global Oliver Wyman Company to start developing the banking sector. This means that it has completed the first phase of the banking reform process, which is drawing up policies, programs and standards and determining the main and sub-goals for the transition to a complete reform by achieving tangible and important results in the field of regulating foreign trade financing and regularity in the global financial system through strict adherence to international compliance standards and building solid international banking relations with global banks and correspondent banks and introducing the local currencies of countries with significant trade exchange to cash transactions in their local currencies in addition to dealing in the US dollar.

Also, activating and strengthening its procedures in the transition from a cash economy to a digital economy and cooperating with the government in expanding the use of electronic payment tools and spreading the culture of transitioning to a cashless society.

Certainly, the above tasks occupied a large part of the efforts at the local and international levels. Within the reform map led by the Central Bank with the cooperation and support of the government and the support of the Prime Minister personally, the focus will be on restructuring government and private banks in a way that does not allow the existence of troubled and unsound banks and starting to implement new policies to support and develop small, medium and large enterprises and support youth according to what was stated in the National Lending Strategy by achieving two main goals:

The first is to increase credit granted to the private sector by 4% of the non-oil GDP until 2029, equivalent to 7 trillion dinars, and the second is to increase credit to finance small, small and medium enterprises by 3% of the non-oil GDP, equivalent to 5 trillion dinars (55% of the financing gap), which contributes to operating 100,000 projects to stimulate and stimulate the economy and achieve development, in addition to starting to establish and license the Riyada Bank and license the Green Bank, which will specialize in sustainable financing of renewable energy projects, as well as moving towards licensing digital banks to keep pace with progress in the field of modern digital banking products.

The electronic platform will also be gradually withdrawn this year. One of the tasks that will begin is the rehabilitation of banks restricted from dealing in the US dollar to comply with international standards in light of the work of the joint committee between the Central Bank and the US Treasury Department, through which the work of these banks in the foreign transfer activity for previous years will also be analyzed and audited by international auditing companies, in the hope that restrictions will be lifted.

What we expect from the procedures and policies adopted by the Central Bank, what has been achieved, and what will be achieved later will be reflected in achieving economic stability by overcoming the challenges of stability in the financial and monetary system, which will contribute to the stability of the exchange rate and the recovery of the Iraqi dinar inevitably.  link