Economy News – Baghdad
In an effort to address pressing issues within the Iraqi banking sector, the Iraqi Special Banking Association recently convened a dialogue session featuring the Governor of the Central Bank of Iraq, Ali Al-Alaq, alongside representatives from various banks and electronic payment companies. This session was dedicated to exploring the challenges faced by disadvantaged banks, including the fines imposed by the Central Bank.
Wadih Al-Handal, the head of the Iraqi Special Banking Association, opened the session by welcoming the governor and participants. He emphasized the critical need for collaborative efforts between the Central Bank, commercial banks, and electronic payment entities to foster financial stability and advance the banking system in accordance with contemporary international standards.
Al-Handal highlighted the formation of a special committee by the Economic Ministerial Council aimed at supporting disadvantaged banks. He asserted the necessity of providing assistance and halting ongoing fines, as these institutions are currently navigating significant adversities. He noted that these banks are proactive in their alignment with global financial requirements and are subject to daily penalties, urging the Central Bank of Iraq to reconsider the imposition of such fines.
In his remarks, Governor Ali Al-Alaq outlined the Central Bank’s initiatives pertaining to banks that are currently barred from utilizing the U.S. dollar. He expressed optimism regarding constructive discussions with U.S. counterparts on this matter. Furthermore, he reaffirmed the Central Bank’s commitment to fostering the establishment of digital banks, which have now increased to 75, a move that is anticipated to expedite the digital transformation of Iraq’s banking landscape. Initially, the Central Bank plans to issue one or two licenses to allow for experimentation and the identification of challenges associated with these digital entities.
Al-Alaq also underscored the imperative for banks to enhance their efforts towards increasing financial inclusion by providing modern banking services that cater to a broader segment of the population. He maintained that transitioning to a digital economy is a fundamental step towards reinforcing financial stability and driving economic development.
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