Cablegate: Najaf Private Bankers Discuss Requirements to Operate Banks
PP RUEHBC RUEHDA RUEHDE RUEHKUK
DE RUEHIHL #0014 0310724
ZNR UUUUU ZZH
P R 310724Z JAN 08
FM REO HILLAH
TO RUEHC/SECSTATE WASHDC PRIORITY 1028
INFO RUEHIHL/REO HILLAH 1091
UNCLAS HILLAH 000014
E.O. 12958: N/A
TAGS: ECON EFIN IZ
SUBJECT: NAJAF PRIVATE BANKERS DISCUSS REQUIREMENTS TO OPERATE BANKS
1. This is a PRT Najaf cable.
2. SUMMARY: PRT Leader and PRToff met with individuals
representing five private banks at FOB Endeavor on January 28,
2008. The purpose of this initial meeting was to introduce
PRToff and to discuss topics concerning local private bankers.
Issues discussed included: combating security fears; operating
with inconsistent electricity; lacking sufficient fuel for
generators; improving Iraqi banking system; training employees;
acquiring new equipment; and operating Automatic Teller Machines
(ATM). END SUMMARY
3. PRToff (Banking and Financial Advisor Darrell Brown)
introduced himself by saying he was here to initiate a dialogue
about their concerns and how to address them as a team.
Discussion centered on the most important obstacles impeding
efforts to operate banks safely and efficiently. Their primary
concerns are addressed below.
4. Several of the bankers stated they had no security
protection. The IA and IP guard the state banks but are not
available for the private banks. Consequently, their ability to
transport and store cash is severely impaired. They are also
concerned they will be kidnapped or robbed. Note: After the
meeting, it was reported Governor Al'Tae promised to authorize
banking staff to carry personal weapons.
5. Another concern expressed was that electricity was available
for three hours a day on average. When asked about generators,
they all replied they have them, but fuel is too expensive.
Note: After the meeting, it was reported Governor Al'Tae
promised to provide them with more electricity and fuel.
6. Several of the bankers complained the banking system is slow
or non-responsive, because it is centrally run out of Baghdad.
For example, one banker said it takes months to get approval to
make a loan. This angers local customers and drives them to
other means of financing. PRToff said he is aware of this
problem and that efforts are underway locally and at the
national level to improve this, but the solutions depend upon
the political will to change and that this will take time.
7. Modernizing equipment and training employees was also
discussed. Many banks are keeping records manually, or on
outdated computers. In addition, many employees are unfamiliar
with modern banking. PRToff said much of this issue can be
addressed by training officers and employees in Iraq and
possibly outside Iraq. He suggested one option could be
developing training courses in conjunction with Kufa University.
8. One bright spot came when Director Hamid Abbas of Warka Bank
spoke. He said his bank has an ATM, just recently implemented a
Visa debit card program and can do international wire transfers
via Western Union. PRToff Brown asked how many merchants in
Najaf accept debit cards. Director Abbas replied only a few,
but that efforts to bring more merchants into the system are
underway. Director Abbas expressed interest in working on
placing ATMs in the Najaf Regional Airport, a top priority of
9. PRToff concluded the meeting, saying the opportunities for
improvement were many, and that PRT Najaf is committed to
assisting the bankers in any way possible, but that the primary
responsibility in making banking work lies with them. They
agreed. The next meeting was discussed, with general agreement
to meet in one of the local banks to discuss moving and storing
cash safely and training employees.