October 25, 2020 | banking

State-owned Iraqi bank announces two more loans option amid economic crisis

ERBIL, Kurdistan — One of Iraq’s largest state-owned banks has announced two more loan options for the public amid a haunting economic crisis, brought about in part by a decline in oil prices and coronavirus pandemic.

Rasheed Bank on Saturday revealed a new loan of 25 million dinars ($20,000) would be available for university professors and teaching staff, as well as a separate loan of 20 million dinars ($16,000) for small-scale business projects. This comes just three days after it announced it would loan 10 million dinars ($8,400) to state employees.

'The borrower should have up to one year of service' in his or her position, the bank detailed.

Rasheed Bank is one of Iraq’s largest state-owned banks, with more than 138 branches across the country.

Such acts by the bank are influenced by the Iraqi government to help 'alleviate the concerns' of Iraqis amid the current economic crisis that has plagued the government and public alike, says one economist.

'The Iraqi banks enjoy a degree of independence when it comes to their economic decisions. Even sometimes the Iraqi government itself receives loans from Rasheed and Rafidain banks because the Iraqi government is currently indebted,' Dr. Govand Sherwani, an oil and economy expert, told Rudaw English of the Rasheed Banks move.

Economist Ali Al-Marsoumi quoted by Al-Hurra had suggested that the bank is offering the new set of loans to protect the value of the local currency and combat inflation.

Sherwani does not echo the sentiment that the bank has made the decision to 'combat inflation,' claiming that it is the 'Central Bank's responsibility to stabilize the value of dinar versus dollar.'

'Each day, the Central Bank sends out 100 to 150 million dollars to prevent any devaluation of the dinar against dollar,' Sherwani said, adding the Central Bank has so far been 'successful' in doing so.

The Rasheed Bank over the weekend made a controversial decision by announcing a 10 million dinar loan to state employees to marry a second wife.

Following outrage against the move on social media, the bank made a second announcement saying this decision applies to 'both sexes,' adding that the granting of the loan is conditional on the request being after “divorce or death” of one of the spouses. In other words, those wishing to marry another wife, while they are still married, may not be eligible for the loan.


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