By John Lee.
The delay in adopting Iraq’s federal budget, in large part due to the dispute between Baghdad and the Kurdish Regional Government over oil exports and revenues, has reduced banking activity in the KRG by up to 25%, according to Adham Karim Darwesh.
Darwesh, the manager of the Erbil branch of the Central Bank of Iraq, was speaking to the Zawya news agency and explained the impact of the recent dispute:
“The delay in adopting the federal budget this year caused a 25% reduction in banking activities, as there was a three-month lag during which the market did not receive large sums of money, including wages of public servants in the governorate, which affected market transactions.”
Darwesh also pointed out how at least two banks, Rasheed Bank and Rafidain Bank had delayed opening branches in the region because of the recent delay in the $150 billion federal budget.
Speaking of forthcoming plans for the banking sector, Darwesh said that their was a plan to unify banking standards across the whole of Iraq, to combat money laundering and corruption.
Several banks were not meeting Islamic finance standards and 5 banks have been threatened with closure over failing to build up capital reserves:
“There are many problems facing the banking sector, including the lack of new technologies in banking transactions and services, as well as the lack of qualified personnel who are up-to-date with the changing industry innovations and technologies.”