The exclusion of 12 banks waged daily currency auction

10/24/2013 12:00 AM

Experts have warned of the acquisition by the banking companies
BAGHDAD - Mustafa Hashemi - شكران of Fatlawi

Varied opinions of specialists in economic affairs on the central bank's decision excluding 12 out of 32 banks waged from the auction currency for not achieving increased their capital to 250 billion dinars within the period set by the bank for those banks , regarding sees an economist , said the decision would influence the banks reputation on both domestic and external .

Academy economist pointed out that the move will open the door wider for brokerage firms to compete in civil banks sell the currency auction , while another expert played down the importance of this by saying that it will provide an opportunity for banks the undisciplined expand civil participation in the auction and buy the currency .

The impact on the stock exchange

In this regard, see economic expert on behalf of Jamil Antoine , the effects of this decision will be reflected on the street a message that private banks are not yet eligible to take their role in the development process , as well as that this step ستربك the banking business.

 Describing in a statement (morning) a central bank that represents the death against equivalents that this measure will generate uncertainty among foreign investors and citizens as well as other influences on the stock exchange and the process of withdrawing confidence of depositors and weaken these banks .

Capital

He pointed out that the impact of this action on the external level will reflect negatively in terms that a number of these banks negotiating with foreign banks to engage with them in partnership banking , calling for the central bank not to alienate the banks and give them another chance to study the possibility of the integration of some or while achieving partnership with foreign banks to enter Iraq .

 For his part, economic expert said that the commercial banks to increase their capital to 250 billion dinars not enough to hold economic reform unless it addressed the paragraph 27 of the Banking Act .

Banking restrictions


Dr Akram Hassan 's "morning" that Article 28 of the Banking Act restricted the banks in the exercise of activities which are at the heart of their work and investment-related as well as prevent them from doing any activity that is not mentioned in Article 27 only after taking approval from the central bank , which prohibits banks exercise any Activity did not mention to this article make banks restricted in the exercise of a particular aspect of the banking business and not to exercise the second side . , and pointed out that the economic reform process starting from the banking reform as a lever key followed by the economy, demanding to lift the restrictions that limit the movement referring to the experiences of the countries of Europe East in this area.

He pointed out that the banking and financial sector , one of the most important factors of the transition from a centralized economy to a market economy .

Moreover endorsed academic Economic Dr. Essam المحاويلي , a central bank to exclude this issue from the banks of the auction sale of the currency and calling it a hold true .

He told the (morning) that the capital of banks, represents the largest protection of deposits , indicating that the inability of some banks to achieve a capital increase within the period specified places in front of the option to merge with other banks or shift to corporate banking , according to central bank's decision .

He noted that the period granted by the Central Bank for banks to increase its capital to 250 billion dinars is long enough being made ​​on several stages and began nearly 3 years , pointing out that the more capital the bank whenever allowed him the opportunity to develop his work and took a role in the development process.

 It consists of the banking system in Iraq of 7 state banks are Rafidain and Rasheed and Trade Bank of Iraq and the Agricultural Bank and the Industrial and real estate in addition to the Bank of Mesopotamia Islamic , which opened this year , along with 32 banks waged locally and 11 branches of foreign banks , including Lebanese and United Arab Emirates , Iranian and Turkish .

He المحاويلي that the implications of this decision will not be reflected on the street where there are a number of other private banks can be resolved in the auction currency instead of banks excluded and do what they were doing from purchases and sales , indicating that the currency exchange rate will not be affected by this measure to the presence of more of 30 banks waged scattered branches in Baghdad and the provinces .



Unfair competition


He said the measure would also open the door to banking companies and financial transfers to enter the auction currency , which generates competition may be unfair between them and the banks participating in the auction the fact that these companies are unknown does not have the experience and reputation that qualifies them to engage in this الغمار .




Control on the movement of money

Meanwhile, a bank director in the Ministry of Finance Dr. Hilal Taan that the bank's target of exclusion came for the purpose of inventory selling and trading of foreign currency banks are limited to control the movement of money and eliminate the black market traders .

He said in a statement to the (morning) that this action will not affect significantly in the currency exchange rate , because there are large reserves in the Central Bank amounted to $ 80 billion and more than 30 tons of gold and therefore, the Bank succeeded in controlling and maintaining the low exchange rate compared to the previous periods .

He pointed out that brokerage firms will take advantage of the void that happened in the auction currency of the exclusion of certain banks because the central bank is able to control levels of the currency market .

Pointing out that the price difference , which may get up tiger or Nmrtin will not affect the movement of the market because it is a matter of course in a country like Iraq passed through difficult circumstances over the last three decades .

He stressed that the bank's decision was issued based on a study of experts and specialists have a long tradition in the auction currency , calling on banks disposed to reconsider their betterment and strive to increase its capital and the duties of monetary policy to achieve that increase was imposed on those banks that take advantage of the time to increase the amount of their capital .

The central bank has decided to exclude 12 banks waged from entering the auction currency ( cash sales and appropriations and transfers ) the failure of those banks to increase their capital to 250 billion dinars .

Also prevent banks excluded from opening branches or any expansion want banks to do until the completion of the increase , as well as امهالها 4 months to complete the procedures to increase .


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