After the launch of its activities in June, Al Qurtas Islamic Bank, one of the five Islamic banks licensed by the Central Bank of Iraq since January, sees its development strategy thwarted by the tension that the Iraqi Kurdistan independence referendum created between the autonomous region’s authorities and the central government. MARC ROUSSOT reports.
Only three months after its establishment, Al Qurtas Islamic Bank had to partly shelve its expansion plan, which included the opening of three branches in the Kurdistan region, as on the back of the Iraqi Kurdistan’s independence referendum held in September, the relationship between the central government and the Kurdish authorities has turned bitter to say the least.
Originally, Al Qurtas Islamic Bank was planning to open five branches in the next few months including one in the city of Najaf, in the central-south of Iraq; one in Basra, in the extreme south of the country; and three in the Iraqi Kurdistan region, namely in the cities of Arbil, Sulaymaniyah and Zakho.
But the bank has abandoned — at least for now — its projects in the northeast region slammed with Iran and Iraq’s partial embargo, while Najaf and Basra’s branches are still in the pipeline for 2018.
In the short term, this is expected to hamper the development of Al Qurtas Islamic Bank, which, with its 37 employees and its only branch in Baghdad — that also functions as its headquarters — serves about 45 customers including 35 individuals and 10 companies.
This idea of expansion and business development is precisely the reason why the board of Hamoon Financial Transfer Company, a remittance company established between 2013 and 2014, decided to apply for an Islamic banking license in August 2015.
As of today, Al Qurtas Islamic Bank’s offerings comprise current accounts, remittance services and Musharakah, and the bank which has already submitted its application to obtain the central bank’s approvals, plans to offer Mudarabah, Ijarah, Murabahah, Salam, Wakalah and letters of credit in the foreseeable future.