Questions About Practices of Private Iraqi Banks

Faizullah claimed to have personally tried to find a solution to this problem, saying, “I have told many of our American politician friends about this matter, but failed to get an encouraging response from any of them.”

Many of the privately held Iraqi banks are owned by businessmen from large families. According to a large number of bank brokers, the majority of clients at privately held banks are either board members, or related to them.

Brayhi went on to affirm, “Family businesses are no newcomers to the private banks in Iraq,” adding, “These banks need guarantees to expand their sphere of activities. The banks fear defaults on loans granted to investors, as there is nothing there to protect them.”

Brayhi continued, saying that privately held banks need guarantees to protect their money, given the high credit risk in the Iraqi market.

“The banks could collaborate with the government, the central bank and the Iraqi financial sector in the formulation and implementation of a number of guarantees that can be extended to privately held banks in order for them to expand their credit and loan activities,” said Brayhi.

He added, “The central bank oversees and monitors the work of privately held banks. The Iraqi public had no interest in monitoring the work of these banks, explaining why the central bank has neglected this aspect of its work, which could have been done more effectively.”