Editing date: 9/8/2020 21:59
An economist revealed, on Tuesday, important information about the benefits of government banks and the involvement of merchants and citizens in them.
Abdul-Hussein al-Mandhari said, “The high interest of loans in the Rasheed and Al-Rafidain banks, as they are self-financing, generates revenues to meet operating expenses.”
He added, “But this does not mean raising interest rates for citizens who doubt that they are detained in payment,” noting that “the Central Bank of Iraq on the subject of 6 trillion dinars, which divided 5 trillion dinars for government development banks (agriculture, industry and real estate), and one trillion was allocated to owners of small and medium enterprises.” It was awarded to private banks, which in turn reduced interest rates last month, after citizens were dissatisfied with their rise.
“Those who received his loan before the outbreak of the Corona pandemic became one of those implicated after the cessation of their business and interests, and Al-Rasheed and Al-Rafidain bankers suffer from the failure of citizens and merchants to pay billions of dinars,” Al-Mandhari added.
And that “the Central Bank, by order of the International Monetary Fund, raised interest rates at banks and granted them freedom to act according to their banking policy,” noting that “Rasheed Bank took the initiative today to reduce loan interest from 8% to 5%.”
In his response about the difference between Islamic and commercial loans in terms of interest rates, Al-Mandhari explained, “The method of implementing loans in Islamic banks differs from the commercial ones that take the method of payment according to the internationally approved bank interest. As for the Islamic ones, they have sales banks (profit to buy) and participations (sale of reclamation and trade) and the two methods. Equal in proportion to the profits collected from the loans.