The central electronic platform for letters of guarantee enhances confidence in banking transactions

Update 06/26/2022 - 12:46 AM

Samir Al-Nusairi
  
In implementation of the Banks Association’s plan for 2022 to establish a number of banking workshops in cooperation with the competent departments of the Central Bank of Iraq, the workshop on letters of guarantee was held and in the presence of all state ministries and relevant departments, with the participation of representatives of the Central Bank and all government and private banks, with more than 200 personalities.

Through my follow-up to this file historically since the issuance of the Banking Law 94 of 2004, so the first and second strategy of the Central Bank and what was emphasized by the first goal in it is to develop the banking sector and focus on internal and external banking operations, in particular banking products of contractual character in accordance with the laws in force. Letters of guarantee, control, control and automation of means to reduce risks in all areas of banking work. Therefore, the bank established the central electronic platform for recording letters of guarantee in order to work to reduce the phenomenon of issuing letters of guarantee without registering them in the bank’s records by registering them in this platform available to banks and beneficiaries via the Internet.

Where banks access it and record data and a copy of the letters of guarantee to obtain a registration number, then all the data is available to the Central Bank to compare it with the financial statements of the banks, and the beneficiary can obtain the validity of the issuance by inquiring about the data of the letter of guarantee through the electronic platform.

The above mechanism, after its implementation, achieved good and accurate results to control and monitor the movement of issuing letters of guarantee in a way that guarantees the rights of the beneficiary in accordance with the law in force, but with audit mechanisms that enhance the mutual trust between our banks, the ministry and the state departments beneficiary from the implementation of various development projects in all sectors.

Where the electronic platform achieved significant results in 2021, as the number of issued letters of guarantee reached more than (30) thousand letters of guarantee, the amounts of which exceed (9) trillion dinars, which confirms the success of the strategy of organizing the issuance of letters of guarantee and increasing the confidence of the beneficiaries in the banking sector in accordance with the new approved mechanism and with the achievement of These results, the Central Bank tries from time to time to conduct an evaluation of the process and amend some instructions that facilitate banking operations and develop them to serve the other and the beneficiary and thus achieve legal guarantees that protect all parties.

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