International Development Bank… The role of private banks in the development of the financial sector in Iraq.
IFPMC-London
February-2022
Banks and private banks play an important role in national monetary operations. In addition to their critical role in providing cash liquidity needed by investment projects, they also contribute to the development of financial and monetary transactions, particularly internal and external credit, in addition to their ability to purchase government debt bonds, which enhances the volume of government cash liquidity.
In fact, private banks with development goals in countries such as Iraq and the Middle East have played a major role in obtaining the necessary funding to meet the sustainable development goals announced by the United Nations, which is considered one of the most important obstacles to development in countries and regions with economic fragility. Development or banks with development goals in this role, as they can narrow the financing gap and attract private sector financing, in addition to being a pillar for contracting partnerships between the public and private sectors, especially financing infrastructure projects and supporting financial inclusion policies.
The private banking sector in Iraq faces many challenges, including those related to organizational and structural problems, imbalance of banking density, imbalance of borrowing activity, weak supervision…etc. In addition to the challenges of the unstable market in Iraq, the credit crisis, guarantee and settlement, the failure of policies and mechanisms, and the inability to develop and expand due to the immaturity of goals and vision.
However, a new stream of private banks has become mature in Iraq, relying on highly efficient boards of directors, using advanced standards in banking and financial dealings, and they are willing to have development goals and a developmental role in the Iraqi economy. In this article, we will present a model of the new generation of Iraqi private banks, the International Development Bank (DIDB), which has succeeded in achieving the two most important advantages in advanced banking:
The first is the use of financial digitization to develop financial transactions, and the second is regional expansion.
Financial digital technology is the foundation of financial inclusion.
The International Development Bank (DIDB) is considered one of the distinguished banking experiences in the Iraqi financial market. Although it was established since 2011, it was able to raise the value of capital in a gradual way, a method not used by many private banks in Iraq that depend on raising capital through speculative rapid booms. The bank was also able to develop its infrastructure to provide advanced services to companies and individuals by using the latest digital financial technologies that are used for the first time in Iraq, which can ensure transparency and solve the problems of regulation and banking density that the most expensive banks in Iraq suffer from. Where the bank provides services in front of banking operations from anywhere and at any time, and this is one of the most important services that help achieve the goals of financial inclusion that Iraq suffers from, as the use of financial technologies that help citizens to access banking services and review their bank accounts has become a critical factor in the success of development Finance, which is the basis for developing and supporting small and medium enterprises, which are the mainstay of sustainable development in countries.
((Our main goal is to become the most innovative bank at the technological level in Iraq by providing the latest technologies, transactions and electronic banking services to our customers))
International Development Bank DIDB
Regional expansion
The opinions of experts in the banking sector differed about the feasibility of regional expansion of banks, while a current of them saw the difficulty of carrying out regional expansion in light of the increase in financial uncertainty and the banks’ fear of exploiting their surplus liquidity, which might expose them to losses.
Another current believes that the current time is the best time to achieve regional expansion in order to attract foreign investment in addition to providing services to Iraqi small and medium companies wishing to expand regionally. The idea of investment development and support for Iraqi companies, businessmen and entrepreneurs was at the top of the list of goals set by DIDB.
The International Development Bank has been able to achieve one of the most important achievements that will be a pioneering leap for the banking sector in Iraq, as the first branch representing the bank was opened in Dubai, which is considered one of the most important financial and banking trading centres in the Middle East, in which economic operations swell in an upward manner to compete with the largest centres business in Asia. The opening of a branch of the Development Bank in Dubai is a big step for the standard work of the bank and its ability to compete, develop and achieve the highest credit quality in a city like Dubai whose financial transactions are subject to high international quality standards. Thus, the expansion step in Dubai for the International Development Bank will raise the ceiling of standards for private banks in Iraq. In addition, the bank has plans to expand and open representative offices in other capitals in the Middle East and the Arab region.
((The International Development Bank continues to work with great care on developing its infrastructure in terms of the geographical spread of the bank’s branches and representative offices in the region, attracting skilled and experienced bankers, acquiring the latest banking technologies, and building a wide network of banks, in order to achieve a positive contribution to economic development in Iraq and help The Iraqi economy in returning to the Arab and international arena and as an influential economic actor in the global financial and banking system)
Ziyad Khalaf Abd
Chairman of the Board of Directors of the International Development Bank DIDB
Finally, it must be said that the banking sector in Iraq must develop and keep pace with global challenges and developments in the global financial sector, and the steps of the new generation of Iraqi banks such as the International Development Bank are considered pioneers in the Iraqi market, where the financial imbalance has become deep and requires effort from bank owners enlightened and armed with a scientific and realistic vision of what the future of financial development in Iraq should be. The banking sector represents the most important link in economic development, and therefore it must be the window from which Iraq overlooks the global economic system and vice versa.
