Iraq’s financial sector was transformed yesterday when the Central Bank extended operating licenses to the National Bank of Kuwait (NBK), UK-based Standard Chartered and the Hong Kong Shanghai Bank (HSBC), ending decades of a state-controlled industry.
"They can start operations as of the middle of March,” said an aide to central bank governor Sinan Al-Shabibi at a recent press conference. “There will be another three foreign licenses announced shortly."
The opening of the banking sector is part of a comprehensive reform program announced by the US-supported Iraqi interim administration in September. The restructuring allows for six foreign banks to acquire up to 100 percent of local banks in the next five years.
Following this timeframe, there will be no limits on foreign bank entry into the country.
Foreign banks were expelled from Iraq in the 1960s. Following the first Gulf War in 1991, Saddam Hussein authorized for the first time the formation of private banks in Iraq. From 1992 until the end of the decade, 17 such banks were established. Up until the second Gulf War, however, these banks were prohibited by Saddam from conducting international transactions – including payments, remittances, and letters of credit. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
