Guarantee deposits and move the labor market

Tuesday 09 July

Baghdad / Mustafa al-Hashemi
 
 
At the same time, the registration department of companies affiliated to the Ministry of Commerce approved the establishment of the Iraqi Deposit Insurance Company / Joint Shareholding. According to the provisions of Article 19 of the Companies Law No. 21 of 1997, a banking specialist confirmed that deposit insurance is the most important step in activating financial activity.


"This company will work to restore confidence between the banking system and the public, which accounts for more than 80 percent of the local currency," said Haider al-Baghdadi.
 
Pump the cash mass
"Deposit guarantee will inject the cash-strapped mass into the local labor market, which lacks the necessary funding in many of its joints, which should be commended for this important step taken by the central bank," Baghdadi said.
The central bank announced that "the company was founded with a capital of 100 billion dinars, and the contribution of 42 banks, including 6 government banks and 21 private banks of Iraq, and 15 Arab and foreign banks, as well as the National Insurance Company and the General Retirement Authority / State Pension Fund.
 
Stability of the banking sector
"This approval comes from the duties of the Central Bank stipulated in its law and with the aim of ensuring the stability of the banking sector and increasing confidence in it."


"Deposit insurance companies have been found to support efforts to stabilize the financial and banking system," he said.


He explained in a study posted on his website that "the functions or functions of deposit insurance institutions are summarized in three axes is to solve the problems of financial failure to the banks, which provides confidence to the founders and depositors, and stabilize the financial system and banking, and work to protect the rights of depositors.


"In view of the urgent need to establish a deposit insurance company to carry out the task of guaranteeing deposits throughout the Iraqi banking system, the Central Bank has prepared a draft system for the establishment of the Deposit Insurance Company for various purposes (the protection of the banking system, the preservation of the rights of depositors and the raising of banking awareness) And companies with the banking system. "
 
Components of financial resources
He stressed that the Council of Ministers "approved the project, subject to the provisions of this system all Iraqi banks, and the financial resources of the company (except capital and reserves) of the monthly insurance allowance of one dinar for every ten thousand dinars of the amount of deposits subject to the guarantee, The company funds, and any financial grants provided to them, and this company, (provide a cover to secure deposits with Iraqi banks authorized by the Central Bank of Iraq within Iraq).
"The company may invest its funds in the areas of investment by depositing them with banks as fixed deposits, buying government securities such as treasury bills, bonds and remittances issued by the Central Bank of Iraq and buying from the secondary market, borrowing from banks or buying loan bonds to support its capital and its own resources" .
The company pays compensation for deposits with participating banks according to the following:
 
 
On January 31, 2018, the Central Bank announced the signing of the bank deposit guarantee agreement with the Founding Authority, which included government and private banks, including foreign companies.
"It is expected that this company will play a major role in protecting the banking sector, especially public deposits (individuals and companies), which enhances confidence in the banking sector inside Iraq and with bank correspondents outside Iraq, which contributes to attracting more deposits and reuse. In credit and investment service to the Iraqi economy.
He disclosed that the company's capital amounted to 100 billion dinars, of which 55 billion dinars from government and private banks, where the proportion of government banks 25 percent, and private banks 30 percent, and the remaining 45 billion dinars will be put for public subscription.




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