The Central Bank of Iraq (CBI) said on Friday that the performance of private banks is better than the performance of state-owned banks, indicating that the lack of restrictions and bureaucracy in private banks gave them a competitive advantage.
Muzher Mouhammed Saleh, the chancellor of the CBI, told AKnews:
"The future in Iraq will be for the banking transactions of private banks to be free from governmental red-tape.
"Investment companies and businessmen don't have fears when depositing their money in private banks .... The increasing number of private banks in Iraq shows the recovery of the economy and liberation from old banking restrictions."
The Iraqi Finance Ministry decided on May 19 to form a committee to develop and organize the work of private banks in the country, because of fears of businessmen and investors to deposit funds in these banks.
The total capital of Iraq's private banks is now $1.6 billion [1.9 trillion Iraqi dinars], up from $30 million in 2004.
There are now 31 private banks throughout Iraq, with more than 600 branches, and they compete in their number and quality of services with branches of the state-owned Rafidain and Rashid banks.