EMPLOYEES WITHDRAW 8 TRILLION DINARS FROM BANKS IN TWO HOURS.. THE MINISTRY OF FINANCE SEEKS A SOLUTION
Crisis of confidence despite the electronic system
Member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, called for stopping the provision of subsidized dollars at an exchange rate of 1,320 dinars for non-essential luxury imports, and instead providing them for the import of necessities such as production lines and agricultural equipment, to reduce the volume of imports later. He pointed out that many private banks were not established according to the needs of economic sectors and that they profit from transfer operations despite being inactive due to their inability to deal with foreign correspondent banks. He also confirmed that the government deposits about 8 trillion dinars monthly as salaries for employees and retirees, but they are withdrawn within only two hours, calling for the matter to be addressed.
oeen Al-Kadhimi, in an interview with journalist Saadoun Mohsen Damd, followed by 964 Network :
The banking system is linked to the Central Bank, the body responsible for regulating banking operations. Numerous workshops have been held recently to develop the banking system. However, there are external factors that influence banks attempting to link up with foreign banks, which also impact the development process.
From our perspective as a parliamentary committee, we believe the Iraqi banking system is still in its early stages of adapting to global regulations. The Central Bank and the Ministry of Finance are required to support the work of banks so they can fulfill their role beyond limited tasks, such as supporting the agricultural and industrial sectors, and other diverse economic sectors.
Some banks are trying to profit solely from dollar transfers, without contributing to other developmental aspects. One of our most important observations is the increasing number of banks being established without feasibility studies. This is despite the fact that they are practically at a standstill because most of them have been unable to link up with international banks to conduct financial transfers, thus preventing them from accessing the currency window.
The Central Bank sometimes justifies some of the violations of its instructions by private banks. It must then address the missing relationship between the public and the banks. Some citizens lost their money after certain banks declared bankruptcy, and the Central Bank must also address this issue.
Improving banking performance is key, and we have approached the Central Bank about addressing the issue of depositing funds and the difficulty depositors face in withdrawing them later, while improving interest rates to ensure depositors feel valued. Most importantly, we are increasing automation, moving away from cash transactions.
The internet is no obstacle to the electronic transformation of financial transactions. Banks must improve their digital applications and technologies to benefit from the country’s internet services and quality. Employee and retiree salaries, which amount to approximately 8 trillion dinars, are now paid electronically, but they are withdrawn within two hours, immediately emptying all banks. This must be addressed.
The Ministry of Finance’s monthly priority is to convert its dollar balances into dinars to boost remittances and foreign imports, which are often for luxury goods, as traders benefit from the exchange rate difference. This must stop, and subsidized dollars must be allocated to essential needs, such as importing production lines, to reduce imports later.
