Iraq’s central bank expects to withdraw the licences of five commercial banks that are unable or unwilling to raise their capital before an end-January deadline, its governor Abdul-Basit Turki Saeed said on Monday.
“Other banks have either fulfilled (the requirement) or have done something, but these five are not working to fulfill it,” Saeed said on the sidelines of a financial conference in Dubai, speaking through an interpreter.
Iraq’s central bank has been pressing the country’s privately owned banks to raise their capital to 250 billion dinars ($215 million) as part of efforts to strengthen the banking system and make it more efficient.
The banks originally had a deadline of June 2013, which was extended to Jan. 31 this year. Iraq has 23 private conventional banks and nine private Islamic institutions, as well as seven state banks and 16 foreign banks operating in the country, according to the central bank website.
Asked what would happen to banks which missed the deadline, Saeed replied: “We just get their licence back. We will not withdraw the licence of others because we can see they are serious about it.”
He declined to name the five banks, noting there was still some time before the deadline expired.