Central Bank of Iraq issued a New Circular for Private Banks

The Iraqi Central Bank issued a report and indicated that some commercial banks Iraq don’t have sufficient investment. The report pointed out that some letters of guarantee have shown generosity of relatives and friends. The magnitude of investments among the total assets in the Iraqi commercial banks is just 8%. The report also said that some of the commercial banks operating in Iraq don’t have an essential amount of investment. It was said that the monetary assets of commercial banks in Iraq were calculated at 46% or 6 trillion Iraqi dinars within the total assets of 13 trillion Iraqi dinars. Most of them were intensified in the assets of the banks with the Iraqi Central Bank. It points out the concentration of their banking activities was mainly focused on the foreign currency selling window.

Central Bank of Iraq issued a New Circular for Private BanksThe report added that the letter of guarantee generally forms the major portion of letters of guarantee. Most cases are letters of kindness to relatives, friends and specific companies in which CBI members of board of directors are directly or indirectly involved. When you drop behind the implementation of projects as an alternative to some marketing mechanism and delay in the submission of letters of guarantee will be considered a violation of the essential requirements of the Article 290 of the Trade Law No. 30/ 1984. On 19th March 2017, the Iraqi Central Bank issued a circular for entire private banks operating in Iraq. This circular will restrict them to follow the standards in order to meet the requirements in selling foreign currencies.

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