Both public and private sectors are working hand in hand to establish and develop a modern financial sector in the Region that can support the economic growth in the Region, measure up with international standards, and be connected to world markets, something that is key to the soundness and efficiency of this sector.
The sector is divided into two parts: the financial markets, where financial products are traded, and financial intermediaries--the banks--which channel funds among financial actors of the economy. In Kurdistan, currently there are efforts to develop both constituents of the sector.
There are plans to connect all the local banks and branches together and to the world financial system via the implementation of a modern electronic banking system; additionally, the Erbil Stock Exchange has officially been established, and its president and board members have been elected.
Regarding the banking sector improvements, director of Kurdistan Region's Harem Bank, Adham Karim Darwesh, says that after successfully completing the test period for the new system, the system will be implemented in all the Region's banks by the end of the year. An electronic system was implemented in four banks in Kurdistan for testing purposes, and it proved successful and practical, noted Darwesh.
"The electronic banking system is considered a development method to connect all the banks in the world," states Darwesh. "We have planned to expand other electronic systems in the local banks to further serve our customers in Kurdistan."
If this system is implemented, all the banks in the Region would be connected and transactions would become easy and smooth. The whole system would be connected to the international financial system, which allows customers of local banks to use their bank services all over the world, such as using their cards to withdraw cash from their Kurdistan bank accounts from automatic teller machines (ATMs) all over the world.
Kurdistan International Bank, a local bank operating on the Islamic banking system that has a number of branches in Kurdistan and Iraq, has signed a contract to design and implement a modern electronic banking system and to improve its services and facilitate access for customers via installing ATMs all over Iraq. There are currently 81 state and 53 private bank branches in Kurdistan Region, all of which will soon be using the new system.
Over the past few years and as the Region's economy has started growing fast, numerous banks have opened in the Region. Among those new banks, a number of foreign banks have also opened branches. In a recent development in that regards, three Turkish banks expressed their intention to open branches and launch services. This came as representatives of a number of Turkish banks visited Kurdistan Region along with the Turkish State Minister for Foreign Trade to participate in the KRG-Turkey Economic Forum.
Those bank branches are to support huge trade activities between Turkey and Kurdistan Region, which are expected to further increase after the visit of the Region's President Massoud Barzani to Turkey to meet with top Turkish authorities.
The representatives of the Turkish banks have applied for legal procedures to open their branches in the Region, and right now they are looking for buildings to open their offices, according to Kareem. "We encounter no issues with the Turkish companies, and some other banks have also applied to invest in the Region," he noted.
In an effort to develop the financial market of the Region, the shareholders of Erbil Stock Market Company met last week in Erbil to elect the board of directors and president after it finished the legal procedures of establishing the company.
The secretary of the high economic council of KRG, Izzat Mullah, states that the Kurdistan Regional Government has supported the idea and helped the establishment of the company to improve the economy of the Region.
"The KRG has continually insisted on creating an environment for local businessmen and traders to have shares in the local companies of Kurdistan," said Mullah. "Erbil Stock Market is possibly creating an opportunity for the local businessmen to use their money inside Kurdistan. On the other hand, it will be a secure place for the foreign investors to keep their money safe in Kurdistan." Currently, some local investors are investing their capital in foreign security markets due to lack of a stock market in the Region.
(Source: Kurdish Globe)