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Islamic banks in Iraq between the increasing demand and doctrinal differences DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Islamic banks in Iraq between the increasing demand and doctrinal differences

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Islamic banks in Iraq between the increasing demand and doctrinal differences Empty Islamic banks in Iraq between the increasing demand and doctrinal differences

Post by claud39 on Mon Sep 16, 2019 9:39 am

Islamic banks in Iraq between the increasing demand and doctrinal differences


Islamic banks in Iraq between the increasing demand and doctrinal differences Rc_156861455660_23

The Islamic banking sector in Iraq is witnessing a growing demand despite the problems posed by the jurisprudential differences, which make the authorization of financial transactions vary from one bank to another according to the religious doctrine of the financial institution.

The decline in the confidence of segments of Iraqis in banks, whether governmental or private, due to the dependence of most of the politicians and some of them exposed to corruption issues, from the recovery of the work of Islamic banks in Iraq in recent years, where Iraqis resorted in recent years to save their money in their homes or converted to gold and hard currencies, In light of fears of exposure to problems in conventional banks, what made according to financial analysts efforts of Iraqi Islamic banks to attract part of these funds is easy.

The eyes of Iraqis began to turn to Islamic banks clearly after 2003, in the areas of mortgages, small and large enterprises and the purchase of goods, because there is no financial interest for those loans in accordance with Islamic law. But banking experts believe that the work of Islamic banks in Iraq needs to develop to obtain greater shares within the local market, pointing to the existence of many problems related to its performance.

Financial expert Hossam al-Rubaie believes that Islamic banks in Iraq face several challenges, most notably how to deal with the issue of interest, pointing out in this regard that this problem is evident in large investments, where the system of Islamic banks differs from government in this regard as well as different from government banks in The system of speculation, loans and financial transactions.

In turn, explained the Iraqi economist, Abdul Majid Jubouri, that Islamic banks rely in their work on capital and reserves as a source of funding is greater than the dependence of government banks on it, pointing out that Islamic banks face challenges, most notably the lack of expertise and specialized cadres, and the inability to employ part of its funds In government debt instruments like other banks do, limiting the diversity of their investment portfolios. 

Jubouri adds that despite all these challenges, Islamic banks in Iraq are growing rapidly in light of the great competition by government and private commercial banks.

It should be noted that the Iraqi banking system consists of 45 banks, including 23 private commercial banks and 9 Islamic banks, as well as 34 financial transfer companies. In the context of the banking race in Iraq to attract customers, the work of Islamic banks in Iraq seems surrounded by the challenges of different doctrines also, which is reflected on all transactions in this country torn by sectarianism.

Mudar al-Nassiri, a researcher in Islamic financial transactions, reveals that Islamic banks in Iraq differ in some of their transactions in matters of jurisprudence, according to the bank's board or owner, which makes a difference in the way of granting the loan and other transactions, adding that the confidence of citizens in Iraq Great for Islamic banks.

Despite the recovery of the work of Islamic banks in Iraq in recent years, but its beginning was with the Iraqi Islamic Investment Bank, the first Iraqi Islamic Bank was established in 1993 with a capital of 120 billion dinars at the time, in order to develop and support the national economy through investment and various projects within the dealings in accordance with the provisions of Sharia .

Experts in the financial sector agree that Islamic banks play a big role in mitigating financial crises, because they deal with real values ​​and not according to speculative transactions, which carry risks for borrowers and depositors, but their investment opportunities with international companies are still limited and need to develop.

Points d. Mahmoud Mohammed, Director General of Financial Operations at the Central Bank of Iraq that the financial crises witnessed in the world clearly revealed the stability of Islamic banks on the world stage, where they were not affected by the way that changes the course of action and products offered to customers, pointing out that this confidence is due to its assets Fixed.

Mahmoud Mohammed pointed out that the largest banks in the world have begun to adopt Islamic banking products, noting that Iraq needs banks more sobriety based in their dealings on real and fixed assets, especially as these banks provide many products, including Murabaha peace and leave, which is very discreet contracts are not available in banks Usually traditional.

Mahmoud noted the decision of the Central Bank during the last period to approve the conversion of 9 financial transfer companies to Islamic banks to exercise their developmental role and expand the provision of products that expand significantly in the world, considering that Iraq's share of Islamic assets few and expansion will work to raise the share of the country, especially as the Its products are characterized by quality and certificates of deposit are bonds, as well as being less vulnerable to fluctuations, adding that Islamic banking in Iraq will positively affect the reality of banking transactions.

For its part, considered the secrets of Basri, Director of International Islamic Bank, the decision of the Central Bank of Iraq to transfer 9 companies for financial transfer to Islamic banks, as it is a support for the construction and reconstruction needed by Iraq, and will have an active role in the financing of projects. 

She explained that the Iraqi government wanted to play Islamic banks in Iraq a role in financing small and medium enterprises, and contribute effectively to finance large projects that achieve economic renaissance, while addressing the lack of employment opportunities and industrial production to contribute to qualitative production.

Al-Basri affirmed the right of the Central Bank's decision to convert the financial transfer companies to Islamic banks after the recent expansion of the latter and achieve great positive results in the world, and proved its role in supporting development operations. This is the secret of the great interest that has begun to take large banks and adopted by the opening of Islamic outlets, pointing to the reason behind this is that the risks in this direction are few because of the existence of feasible products economically and covered with real assets reduce their vulnerability to crises.

Al-Basri revealed that the coming period will witness the establishment of blocs between Islamic banks with the aim of providing financing to major development projects in order to achieve the great economic feasibility of the national economy, which suffers from many problems. Al - Basri called for activating the role of the Association of Islamic Banks so as to have a supervisory role to assess the reality of the situation of Islamic banks in Iraq, with the development of plans to promote the sector in order to expand its contribution to the process of sustainable development.

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