Private Banks ineffective in boosting Kurdistan's economy
Saturday, January 23rd 2010 4:21 PM
Erbil, Jan. 23 (AKnews) – In addition to the many state-run banks in Kurdistan, there are more than 50 private banks in the region, however, economists believe they have not added anything to the region's economy.
There are 81 government banks in Kurdistan, in addition to 53 private banks, but, only three of the private banks are international, Kurdistan Central Bank's Erbil branch Director Adham Karim Darwesh said Saturday.
Darwesh said banks, whether governmental or private, depend for their business on public money; people put their money into the banks and the banks use it, along with their money, in investment.
But "our people neither let the banks put their money into business, nor put it into business by themselves, therefore the banks are ineffective" Darwesh added.
Director of the private Cihan bank, Fazil Karim Qadir, said their bank followed an Islamic system of banking; which does not pay interests nor does it not take any when loaning their money.
Karim said they put people's money into projects, and at the end of the year the profits and losses will be calculated accordingly.
Investors of the bank got a profit of %9.2 of their money in a period of around one year, according to Karim.
When a private bank is set up in Kurdistan Region the bank has to deposit a sum of ID250 billions in the central bank of the region.
Meanwhile, economist and expert in private banking sector, Ramazan Kocher, said the private banks in Kurdistan had not implemented substantial investment projects to conducive to the reconstruction of the region's infrastructure.
The banks have not added any profit to the region's economy, because they do not have adequate capital in use, according to Kocher.
The main task of the banks has become the payment of salaries, therefore private banking business is ineffective in Kurdistan, Kocher added.
People do not trust banks in Kurdistan he said; in particular the private banks, but neither do the banks trust people.
To create an atmosphere for citizens to trust banks and invest their money, banks should follow Islamic system of banking, according to economist and University instructor Ayyub Anwar Smaqayi, "because 90% of the people of Kurdistan are Muslims and consider interests as Haram (forbidden)"
Report by Aras Salah
Translation and Editing by Raber Younis (AKnews)
http://www.aknews.com/en/aknews/2/106614/
Saturday, January 23rd 2010 4:21 PM
Erbil, Jan. 23 (AKnews) – In addition to the many state-run banks in Kurdistan, there are more than 50 private banks in the region, however, economists believe they have not added anything to the region's economy.
There are 81 government banks in Kurdistan, in addition to 53 private banks, but, only three of the private banks are international, Kurdistan Central Bank's Erbil branch Director Adham Karim Darwesh said Saturday.
Darwesh said banks, whether governmental or private, depend for their business on public money; people put their money into the banks and the banks use it, along with their money, in investment.
But "our people neither let the banks put their money into business, nor put it into business by themselves, therefore the banks are ineffective" Darwesh added.
Director of the private Cihan bank, Fazil Karim Qadir, said their bank followed an Islamic system of banking; which does not pay interests nor does it not take any when loaning their money.
Karim said they put people's money into projects, and at the end of the year the profits and losses will be calculated accordingly.
Investors of the bank got a profit of %9.2 of their money in a period of around one year, according to Karim.
When a private bank is set up in Kurdistan Region the bank has to deposit a sum of ID250 billions in the central bank of the region.
Meanwhile, economist and expert in private banking sector, Ramazan Kocher, said the private banks in Kurdistan had not implemented substantial investment projects to conducive to the reconstruction of the region's infrastructure.
The banks have not added any profit to the region's economy, because they do not have adequate capital in use, according to Kocher.
The main task of the banks has become the payment of salaries, therefore private banking business is ineffective in Kurdistan, Kocher added.
People do not trust banks in Kurdistan he said; in particular the private banks, but neither do the banks trust people.
To create an atmosphere for citizens to trust banks and invest their money, banks should follow Islamic system of banking, according to economist and University instructor Ayyub Anwar Smaqayi, "because 90% of the people of Kurdistan are Muslims and consider interests as Haram (forbidden)"
Report by Aras Salah
Translation and Editing by Raber Younis (AKnews)
http://www.aknews.com/en/aknews/2/106614/