This website uses cookies to ensure you have the best experience. Learn more

Financial Sector Banking Essay

3545 words - 15 pages

EXECUTIVE SUMMARY

xv

EXECUTIVE SUMMARY

The link between sound and well-developed financial systems and economic growth is a fundamental one. Empirical evidence, both in developing and advanced economies, has shown that countries with developed financial systems grow at faster rates. Efficient and prudent allocations of resources by the financial system is crucial for increasing productivity, boosting economic development, enhancing equality of opportunity, and reducing poverty. Getting the financial systems of developing countries to function more effectively in providing the full range of financial services is thus a task that will be well rewarded with economic growth. This report ...view middle of the document...

Banking System The banking system is still by far the most important part of the financial system, accounting for more than 75 percent of the assets. Seven state banks dominate the banking system (in particular, Rafidain Bank, Trade Bank of Iraq (TBI), and Rasheed Bank). Private banks are generally quite small and many have been established relatively recently. Seven of the 36 private banks have foreign participation and eight operate according to Islamic principles. Official figures vastly overstate assets of Rafidain Bank and Rasheed Bank (because of carryover of valuation losses equivalent to the double of GDP); staff estimates indicate that state banks account for 86 percent of bank assets and 69 percent of credits. The banking system is small, with an adjusted asset to GDP ratio of 73 percent compared to 130 percent for the Middle East and North Africa (MENA) region. Although growing rapidly in 2010 credits to the economy only amount to 10 percent of GDP compared to 55 percent for the MENA region. As a corollary, banks are very liquid; foreign assets and deposits at the Central Bank of Iraq (CBI) amount to 63 percent of assets. The operations of Rafidain Bank and Rasheed Bank (the two large state banks with country wide branch network) are inefficient and the two banks suffer from the legacy of past losses as well as from carrying out of quasi fiscal operations. Reform of the two banks has been significantly delayed from what was envisaged in a 2006 Memorandum of Understanding (MOU) between the CBI and the Ministry of Finance. Several committees have been working but little progress has yet been achieved, including in the technical area of cleaning up the two banks’ balance sheets. A World Bank project has been supporting the reform process since 2009. The reform process for Rafidain Bank and Rasheed Bank needs to be accelerated, including through the carving out of disputed items from their balance sheets and their transfer to a new asset/liability management company. More fundamentally, the authorities need to consider the relative roles they wish to assign to state banks and private banks, including the role to be assigned to the TBI. The TBI was set up as a specialized trade bank, but now operates as a general commercial bank and has become an important player in the financial system. As part of this overall strategy, state banks must become subject to normal supervision by the CBI. Private banks operate on an uneven playing field. State banks benefit from the perception of a de facto deposit guarantee and from restrictions imposed on the operations of the private banks. Government, government agencies, and state

EXECUTIVE SUMMARY

xv

owned enterprises are not allowed to place deposits with private banks. Nor can state-owned enterprises receive loans from private banks. Moreover, payments to the government (taxes and other payments) cannot be effected by check drawn on a private bank. Discussions are under way among private...

Other Papers Like Financial Sector Banking

Growth of Telecom Sector in India

1584 words - 7 pages CHAPTER-1 INTRODUCTION TO INDIAN BANKING SYSTEM: OBJECTIVE- Here our main objective is to analyse the impact of mergers and acquisition in banking sector in India. We will try to find out from the experience of US and EU how Indian banking sector will respond if some major players merge together. In this report we will create a situation in which five big players in banking sector merge together and we will analyse the effect of merger

Fiancial Incluion Essay

369 words - 2 pages internet banking, rather than standing in the queue in the offices of the service. Financial inclusion also includes: I. Nationalization of private sector banks, II. Introduction of priority sector lending norms, III. The Lead Bank Scheme, IV. Branch licensing norms with focus on rural/semi-urban branches, V. Interest rate ceilings for credit to the weaker sections and VI. Creation of specialized financial institutions to cater to the requirement of the agriculture and the rural sectors having bulk of the poor population.

Banking Industry

1818 words - 8 pages BANGLADESH RESEARCH Swinging Banking : Not Very Promising August 13, 2002 Not too bad if you may claim so ….. The Bangladesh banking sector relative to the size of its economy is comparatively larger than many economies of similar level of development and per capita income. The total size of the sector at 26.54% of GDP dominates the financial system, which is proportionately large for a country with a per capita income of only about US

History & Development

4310 words - 18 pages investors the option to receive payments denominated in gold bullion as an alternative to the USD Development of Islamic Banking and Finance in Other Countries (4) Gulf Cooperation Council (GCC) States • Kuwait – Oil-rich Kuwait has huge financial resources (10% of global oil reserves is in Kuwait) – Oil & gas sector off limits to foreigners but they may invest in the banking sector – Central Bank of Kuwait (CBK) announced the enactment of law

Bancassuarance

783 words - 4 pages EFFECTIVENESS OF THE BANCAASSURANCE PRODUCTS OF THE INDIAN BANKING COMPANIES. A SYUDY WITH SPECIAL REFERENCE TO KERALA INTRODUCTION Both the term banking and insurance are the financial service industries which are beneficial to the customers forever. Untill recently banking and insurance had been two strictly segregated areas of activity. Now this position has changed. The era of privatization, liberalization, Deregulation and

E-Banking

3905 words - 16 pages or savings accounts as many consumers may think. Electronic banking (e-banking) involves many different types of transactions; it is a form of banking where funds are transferred through an exchange of electronic signals between financial institution, rather than exchange of cash, cheques or other negotiable instruments. On line banking system is a way of conducting, managing, and executing banking transactions utilizing information and

Green Banking

4779 words - 20 pages HSBC, among large global banks, was a runner-up in any category. As a regulator of Financial sector, the central bank already proceeded a long way in implementing green banking. The central bank issued policy guidelines for green banking in February 2011. Banks in Bangladesh have enthusiastically responded to Bangladesh Bank’s guidance towards green banking, with steps in environmentally responsible financing that are beginning to make profound

Technical Analysis Of Banks

3127 words - 13 pages system | |The Indian financial system currently consists of commercial banks, co-operative banks, financial institutions and non-banking financial companies ( NBFCs). The commercial| |banks can be divided into categories depending on the ownership pattern, viz. public sector banks, private sector banks

Reversing Bank Nationalisation

1396 words - 6 pages & Toubro have expressed interest in opening banks in August 2011.  With the passage of the Bill, it will be a matter of time before new private sector banks enter the fray, many of them set-up by the corporates. After the global financial crisis in 2008, when several banks and financial firms collapsed in the US and Europe, the Indian banking system was unshaken.  The main reason for this was the failure of the Manmohan Singh government to

Case Studies

522 words - 3 pages market developmenton banks’ capitalization ratios mainly appears during 1990–1999, and that this linkage disappearsduring 2000–2012. In the context of my analysis, two dimensions of financial markets developmentseem to have opposing effects on bank risk. While stock market development tends to have no adverse effect on banks’ capitalization ratios and lower the level of a bank’s beta, banking sector developmentinduces the instability of the

Kfc V/S Mcd

3964 words - 16 pages International Journal of Techno-Management Research, Vol. 01, Issue 01, June 2013 ISSN: 2321-3744 Customer Satisfaction of Online Banking in SBI and ICICI-A Comparative Study in Pune City Dr. Priya Anand Irabatti Professor, Bharati Vidyapeeth Deemed University, Pune Abstract Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or

Related Essays

Adoption Of Internet Banking And Customer Behaviour

608 words - 3 pages Adoption of Internet Banking and customer behavior The financial service industry plays very important role in the development of any country especially in country like India where service industry is contributing app. 48% of overall GDP And also financial sector is growing at the rate of 8.02% (according to SBI). By knowing such a huge importance of banking industry in India, it is very important to monitor and access new development in the

Universal Banking Essay

1505 words - 7 pages the DFIs and Universal Banking or installation of cutting-edge-technology in operations are unlikely to improve the situation concerning NPAs. Universal Banking in India In the early nineties the forces of globalization were unleashed on the hitherto protected Indian environment. The financial sector was crying out for reform. Public sector banks which had a useful role to play earlier on now faced deteriorating performance. For these and

Jordan Bank Essay

667 words - 3 pages Management (TQM) practices (customer satisfaction, education and training, continuous improvement, teamwork, and top management commitment) on organizational performance (financial and non-financial) in the Jordanian banking sector. The banking sector is the largest sector in the service industry that serves the needs of different categories of people. Currently, TQM has become the new method to reinforce competitive advantages and organizational

Agency Banking Essay

1565 words - 7 pages the cost of financial services and to foster financial inclusion, reach and depth. Commercial Banks worldwide offer similar kinds of services, but they could provide differences in terms of service quality. This paper analyzes past studies regarding service quality improvement in the agency banking sector. The continuing trend to a model of service quality improvement, from personnel counter services to electronic services, will be demonstrated