Iraq Economic News and Points to Ponder Monday AM 3-11-24
Tlm724 Administrator Bondlady’s Corner
{Financial Digitization}.. A Factor To Reduce Inflation And Absorb Hoarded Funds
Economical 03/10/2024 Baghdad: Haider Falih Al-Rubaie Economic affairs specialists have identified the most prominent advantages that digital transformation can achieve in banking, placing at the forefront of these advantages the
elimination of inflation through the use of small denominations, and the
absorption of citizens’ hoarded cash mass, estimated at more than 95 trillion dinars, while
they praised the Central Bank’s measures. In providing the appropriate ground for achieving financial digital transformation,
they stressed the necessity of doubling the distribution of points of sale and working to oblige all government and private institutions to operate with electronic cards.
“The electronic transformation of the use of money in daily transactions” is of utmost importance in the government’s directions, which is making great efforts to complete this direction, especially after “the Council of Ministers had previously obligated
private educational institutions, universities, private colleges,
fuel processing stations,
centers and
shops of all kinds, In addition to
restaurants,
pharmacies,
private medical clinics,
stores,
all wholesale and retail marketing outlets, and
professionals,
there must be a minimum amount of their cash receipts through the electronic point-of-sale (POS) system.
Despite the short period of time in which it was officially decided to actually start using electronic payment methods (POS) in the country,
“the World Bank believes that the infrastructure for electronic payment systems in Iraq is the best in the region,” praising during a previous meeting with the Governor of the Central Bank, Ali Mohsen Al-Alaq, Director of the World Bank Office in Iraq, Richard Abdel Nour, explained
“the Central Bank’s procedures for facilitating financial transfers to different segments in Iraq.”
The process of “banking digitization” also represents a vital factor in achieving many economic advantages in the country, according to the banking expert and member of the Board of Directors of the Iraqi Association of Islamic Banks, Dr. Abbas Fadel Rahim, who stressed that
“digital transformation has become an important factor in all countries of the world, and it is
“This makes it imperative for all banking institutions in Iraq to use the latest knowledge in this field to keep pace with the development of banking work that most countries of the world have reached.”
In an interview with “Al-Sabah” on the sidelines of an economic symposium on the importance of digital transformation in banking, Abbas believes that
“technical developments in banking can help financial institutions and individuals achieve a number of positives, including
investigation,
financial inclusion,
security,
profitability, and
liquidity,” indicating that
“All banks in Iraq, private and government, operate under the umbrella and laws of the Central Bank,
which has made important steps in the field of electronic banking, and has
worked to provide the appropriate ground for achieving electronic banking transformation, as well as
enabling financial institutions to work and advance in this direction to be able to It provides advanced financial business.” Abbas pointed out that the
electronic transformation of banking carries a number of advantages that can be
reflected positively on the economic reality in the country, especially in the field of
absorbing part of the citizens’ accumulated cash mass, as the digital transformation will
relieve citizens of the need to carry or hoard sums, in addition to that The
transformation is able to play a vital role in reducing the high rates of inflation, due to the use of parts of the currency in electronic trading, and therefore the matter
will save families sums of money that can meet other parts of their daily requirements when using electronic cards, indicating that ………
trading in small denominations of less than 250 dinars is almost non-existent, so the
use of electronic cards will use those amounts, noting at the same time that the
high inflation rates are the result of many global factors that have greatly affected prices, especially the Russian-Ukrainian war. Abbas also explained that
among the advantages that the digital transformation of banking in Iraq can bring is the
complete elimination of the circulation of counterfeit currencies, and the
reduction of bribery operations due to reducing friction and direct dealing between citizens and employees,
calling for intensifying efforts to increase electronic card sales stations (POS).
In turn, the researcher specializing in economic affairs, Durgham Muhammad Ali, explained that
there are a number of steps that would make electronic payment operations successful in Iraq, noting that
among those steps is “the availability of promotional and procedural elements,” indicating that
“the procedural elements are primarily based on encouraging economic activities.” From shops, restaurants, malls and markets to acquire electronic payment devices (POS) and
provide financial privileges represented by granting tax allowances or other incentives to users of electronic cards.
Muhammad also stressed the importance of
“facilitating the process of citizens obtaining electronic payment cards, by
spreading more outlets for selling and charging these cards in residential and commercial areas outside banks,” pointing out at the same time that
expanding the process of using electronic cards will achieve many positive economic factors. At the forefront of which is
reducing the need for annual printing of cash, and
increasing circulation in cash denominations of less than 250 dinars, which is reflected at the end of the month in the family budget.
The economic affairs specialist called for the necessity of “reducing the operator’s commission or paying it by the state to encourage the adoption of these technologies to increase financial inclusion in the country.” https://alsabaah.iq/93145-.html
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