AFP reports that Iraq’s privately-owned banks have called for the country’s state-owned lenders to be privatised, to break up a near monopoly in lending by politicians whose actions remain stuck in the Saddam-era.
Although foreign cash has flowed in since the US-led invasion of 2003, ministers still opt to use government banks to do business and are failing to use private rivals, which is hampering economic growth, bankers argue.
The lack of a new government and poor security are also stifling efforts among international banks to plant a solid foothold in Iraq, whose economy, with the exception of oil, is showing little sign of improvement despite low inflation and a stable currency.
Fouad al-Hassani, chairman of the Iraqi Private Banking League, said the next government should privatise the seven state-backed lenders to create a level playing field among banks, as promised under the constitution.
“Unless they are privatised the government will still lean on their own banks,” he said. “That is not in line with an open market policy.
“We are looking for a new government so that we can talk to them again. The constitution is very clear on what they should do.”
Iraq currently has 36 privately-owned banks, most of them each holding capital of 50-150 million dollars, compared to 17 private banks during the rule of dictator Saddam Hussein, ousted in the invasion.