Central: raising the capital of banks to 250 billion dinars came to strengthen them

Central: raising the capital of banks to 250 billion dinars came to strengthen them

Advisor, Central Bank of the appearance of Mohammed Saleh, said that the decision to lift the capital of private banks to 250 billion dinars came to strengthen them, because the weakness of capital reduces the funding opportunities and to mobilize financial resources for development and construction real.
The dealers in the Iraqi Stock Exchange stated that the banking sector suffered a jolt led to the decline in the rates of companies following the arrival of news of the decision to raise the capital's central banks to 250 billion dinars to 2014, appealing to the central decision and wait until the adjournment of the stability of political and economic situation in Iraq.
Salih noted that banks in general have no role in the area of investment, although it has liquidity by more than 60% is not possible to put pressure on banks in this difficult time as the decision will make it stronger and those banks with greater capital and greater ability to lend more broadly.
He said the opportunities before them are either raising capital or that the two banks are merged or three together to form a large banking entity and thus be more money and stock prices in the green.
He said the decision will contribute to the mobilization of financial resources to serve the economic development in the country, because the majority of banks to capital does not exceed $ 50 million, and such amounts are not worth anything in front of development projects.
He stressed that the Central is keen to protect and support these banks, although their numbers are increasing dramatically, but they do not constitute 1% of the GDP for the total Iraq.

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Increasing Banks’ Capitals to ID250 Billion to Strengthen Them

March 17, 2010 - 08:58:46
BAGHDAD / Aswat al-Iraq: The decision to raise the capitals of special banks to 250 billion Iraqi dinars aims to strengthen them as the lack of capitals decreases the financing capability for the real development purposes, the Central Bank of Iraq’s advisor said on Wednesday.

“Banks in general do not have a role in the investment field despite they enjoy a liquidity percentage which reaches more than 60% and we can not pressure banks in this critical situation as the decision will make banks stronger and with more capitals, which will increase their capabilities in lending,” Mathhar Mohammad Saleh told Aswat al-Iraq news agency.

“The decision will contribute in increasing the financial resources to serve the economic development in the country as most of the Iraqi banks’ capitals do not exceed $50 million, which can’t do anything regarding the development projects,” he explained.

SH (P)

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