Central Bank of Iraq / Basra Branch

Statistics and Research Department / Research Division

Banking Services Guide in the Southern Region

Dr. Qasim Rahif Marib / General Manager
Khadiga Adnan Hamid / Examiner
Hussein Ali Mohammed / Assistant Examiner
Basra, Dhi Qar, Muthanna, Maysan

No.	Title	Page
1-2	Introduction
2-13	Personal Services
1	Savings Accounts
2	Current Accounts
3-4	Deposit Accounts
5-8	Transfers
1	Sold Internal Transfers
2	Bought Internal Transfers
3	Collection Transfers (Bills)
4	Branch Transfers
7-13	USD Sales to Citizens per Regulations
8-10	Personal Loans
8	Types of Personal Loans
9-10	Types of Agricultural Loans
11-12	Agricultural Loan Application Procedures
10-12	Types of Real Estate Loans
13	Loan Conditions
13-20	Corporate Services
1	Regulations for Opening Current Accounts for Iraqi Companies
2	Regulations for Opening Current Accounts for Foreign Companies
3	Regulations for Opening Current Accounts for Associations, Unions, Syndicates, Political Parties, Clubs, and Chambers of Commerce
4	Regulations for Opening Current Accounts for Diplomatic Entities
16-20	Letters of Guarantee
1	Parties to the Letter
2	Procedures
18-20	Documentary Credits
21	Safe Deposit Box Rental
21	Bill Issuance
22-24	Companies and Individuals Services
1	Soft System Service
2	Western Union Money Transfer Service
3	Investment Portfolio
24-27	Islamic Services
1	Savings Account
2	Islamic Deposit Account
3	Murabaha LC
4	Mudaraba
5	Musharaka
6	Istisna'
7	Salam Contracts
27-40	Electronic Payment Services
1	KiCard
2	Visa Card
3-4	MasterCard
34	Types of MasterCard Cards
1	Platinum
2	Gold
3	Classic
4	Prepaid
37-38	ATM Withdrawal Method
39	POS Usage Method
40	Special Banking Services for Certain Banks
42	Mobile Phone Services
44-48	ATM Locations (ATM)
49-57	Branches of Banks Operating in the Southern Region

Introduction

Most Arab countries and Iraq have recently adopted a strategy aimed at achieving financial inclusion, meaning making financial products and services accessible to individuals and companies at affordable prices that meet their financial needs regardless of economic status. The availability of financial services facilitates daily life for members of society and helps families and companies plan, utilize financial services such as credit and insurance to start and expand businesses, invest in education or health, manage risks, and face shocks, thereby improving their lives and raising the economic level. Some believe that individuals who are not poor enough to benefit from banks can now access useful savings and borrowing opportunities, enjoying the security provided by the bank as a saver while feeding their savings with interest. Additionally, choosing accounts allows for managing various savings goals separately. Bank savings help keep money out of reach of others who might pressure you to spend it, and borrowing from the bank helps build a recognized formal credit history, which is more reliable than informal lending experiences. Furthermore, the government oversees banks, limiting deposit risks.

Financial services for all and opening the door to wide and adequate financial access can change people's lives, enabling them to save more securely and comfortably. Saving some money for times of hardship is important for everyone, especially the poor whose financial circumstances are unpredictable. Owning an account for transactions makes it easier to afford better food and prepares one better to face health crises. When saving begins in youth, it fosters sound financial habits and secures education. With financial services available to all, people can save small amounts of money properly, making it easier for individuals to safely receive government benefits.

This guide aims to build financial literacy and introduce the financial services available in the Southern Region, provided by bank branches there, including services for individuals and companies, as well as special banking services offered by banks. The guide also includes a description of how to obtain each banking service.

The importance of this guide stems from the need for financial culture and awareness regarding available services in the Southern Region. Lack of knowledge about a service prevents its request even when needed, and this guide explains how to access services and the procedures for obtaining banking services provided by branches operating in the region, addressing the need for awareness of these services and how to access them.

Savings Accounts

• These are accounts representing amounts deposited by individuals at the bank, with deposits being of various types.
  Interest rates on savings accounts are calculated at the end of each month on the lowest closing balance during the month, and interest is added upon closure or at the end of the year for all active and inactive accounts. A supervision and monitoring commission is deducted from inactive accounts at the end of each year.

Current Accounts

• A current account is an agreement between two parties to record in the account through mutual and overlapping payments, debts arising from transactions between them involving cash delivery, money, or negotiable commercial papers, etc., and to compensate for settling these debts on an individual basis with a final settlement resulting in the account balance upon closure.

Types of Current Accounts:

1. Ordinary Current Accounts: These are standard current accounts opened according to opening conditions, where owners deposit and withdraw up to the credit balance without exceeding it.
2. Overdraft Current Accounts: These allow owners to withdraw amounts exceeding the deposited funds, limited to facilities granted by the bank.

Services: Withdrawal and deposit services, ordinary and special clearing services, check certification, stopping payment of lost checks, providing customers with current account confirmation letters and copies of issued checks.

Required Documents: Civil ID, nationality certificate, residence card, ration card, phone number, identification letter from bank customers and known/trusted persons holding accounts.

Deposit Accounts

• These are amounts deposited at the bank for a specific period determined by individual sectors, corporate sectors, associations, or other sectors, at varying interest rates. Deposit amounts are fixed and cannot be withdrawn or deposited during the period from the start date until maturity.

Types of Deposits: Fixed (6 months, 1 year, 2 years), Demand deposits.

Required Documents: Civil ID, nationality certificate, residence card, ration card, phone number.

Transfers

Customers can send money to external banks worldwide and within the country.
Types: Sold internal transfers, Bought internal transfers, Collection transfers (bills), Branch transfers.

1. Drawn on bank branches by check.
2. Drawn on bank branches by payment order.
3. Drawn on bank branches by collection.
4. Drawn on bank branches telephonically/electronically.

Sold and Bought Internal/External Transfers: A primary banking service is transferring amounts inside and outside Iraq through its branches, other banks' branches, or correspondents. It fulfills requests from natural or legal persons to transfer desired amounts to other parties or individuals in another city in Iraq or abroad, reducing burdens on senders and avoiding potential risks of carrying cash personally. The bank charges an appropriate commission for this service. Legitimate holders of checks or transfers drawn on current accounts at a specific bank's branches, other banks, or the Central Bank of Iraq in other cities can apply to any bank to purchase them (i.e., the bank pays the check/transfer amount to the holder in a location different from where it was due), transferring ownership to the bank via endorsement for a fixed commission. Savings account holders can also withdraw from their accounts at banks in other cities.

Bought Internal/External Transfers:
Collection Bills (Safatij): Every bill of exchange, promissory note, check, letter of guarantee, or other collectible document submitted to the bank is recorded in the depositor's account upon collection from the debtor's account, not upon deposit. The bank charges a commission according to instructions. Bills for Collection at the Bank: Deposited at the bank branch, collected from the debtor's account in the same branch. Bills for Collection at Another Branch: Collected from the debtor's account in a different branch.

USD Sales to Citizens per Regulations

Currency operations are based on buying and selling cash currencies (US Dollars) from bank customers, official departments, and companies, relying on market prices of the nearest exchange, through a committee formed in the branch with authorized employees. The bank benefits from profits realized from sales and purchases and commissions. A commission is imposed on small currency purchase operations.

Regulations:

1. Sales are for purposes (tourism, official dispatch, Hajj and Umrah, treatment, study abroad, etc.), not exceeding $3,000 per request, with applicants present in person. Minors' requests are not accepted.
2. The selling price per dollar is determined by the cost price (purchase price from the Central Bank) + profit margin per dollar.
3. Eligibility for purchase applicants relies on providing a valid passport, travel ticket from air/travel companies, and visa for the destination country, plus an official dispatch order.
4. Eligible persons under paragraph (1) may submit one purchase request per month to a bank branch, not exceeding 3 requests annually per citizen (except dispatched personnel), requiring a new official dispatch letter from their department each time.

Required Documents: Travel ticket + valid passport (for personal, family, and household purposes like home improvement, travel, car repair).

Personal Loans

Purposes: Personal, family, and household purposes such as home improvement, travel, and car repair. To obtain this loan type, repayment capacity must be proven, a good credit history maintained, and valuable assets pledged as collateral.

Types of Loans Provided to Citizens:

1. Small Project Loans (3 years)
2. Commercial and Tourism Loans (3 years)
3. Judges' Loans (15 years)
4. Investment Loans (15 years)
5. Residential Unit Loans (excluding Basmah Project) (15 years)
6. Student and Faculty Research & Financing Loans (5 years)
7. Operational Loans for Private University, School, and Kindergarten Owners (5 years)
8. Operational Loans for Tourism Hotel Owners (12 months)
9. Private Company Vehicle Loans (5 years)
10. Doctors, Pharmacists, and Veterinarians' Loans (5 years)
11. Citizen Housing Loans in Liberated Areas (10 years)
12. Citizen Housing Loans (50 million for area not less than 200 sq.m) (10 years)
13. Retirees' Advances (40 months)
14. Employees with Salaries Paid via MasterCard Loans (5 years)
15. Banking Facilities / Overdraft Renewal (Continuation/Increase/Cancellation) + Loans per Agreement (4 years)
16. Production Project Loans (3 years)
17. Medical Laboratories and Pharmacies Owners' Loans (5 years)
18. Renewable Energy (Solar Power) Loans (5 years)

Required Documents: Civil ID, nationality certificate, residence card, ration card, phone number, identification letter from bank customers and known/trusted persons holding accounts.

Agricultural Loans

Types: Greenhouses, apiaries (honeybees), field crops, summer vegetables.
Purchasing agricultural machinery, poultry projects loans, buffalo breeders' loans, production vehicle loans.

Real Estate Loans

Types: Loan for building a residential unit, Additional construction loan, Loan to purchase an apartment from complexes.

• Maximum loan amount: 50 million dinars per case, contract duration: 10 years (non-extendable).
• Interest rate: 3%, repaid in equal monthly installments.
• Time limit for completing the transaction and preparing for disbursement: 30 days for construction or additional construction; purchase transactions are paid in full to the customer after completing the first-degree registration lien at the competent real estate registration office.
• The branch submits periodic reports every three months on completed work.
• Purchase of residential units in investment complexes or public sector complexes, with unit area not less than 65 sq.m.
• For construction or additional construction for those owning residential land independently or jointly, with land area not less than 100 sq.m and net construction area not less than 65 sq.m. Loans are not granted for agricultural or industrial lands.

Loan Conditions: (See above)

Agricultural Loan Application Procedures

1. The loan applicant visits the agricultural bank branches in their work area, stating the project type and required amount by submitting a request according to geographic region.
2. Submit clear, recently issued documents of the borrower.
3. Submit a copy of the lease agreement and proof of ownership of the agricultural land with valid issuance.
4. Submit a commitment to execute the loan amount for the required purpose.
5. Commitment not to apply for a loan from any other bank or its branches, and verification of settled dues.
6. Fill a special form according to the project type with all data recorded in the loan application form (exact purpose, required amount, borrower details).
7. Site inspection of the project by bank employees.
8. Real estate collateral inspection by a joint committee of branch staff and real estate registration office members.

Corporate Services

First: Regulations for Opening Current Accounts for Iraqi Companies:

1. Letter issued by the foreign company to the bank, signed by the authorized manager, requesting opening a current account, containing names of persons authorized to operate the account, signature samples, and job addresses.
2. Original or certified copy of the branch/office establishment license in Iraq issued by the Iraqi Companies Registration Department.
3. Establishment license of the foreign company in its home country issued by the competent authority and certified by the Iraqi Embassy there and the Iraqi Ministry of Foreign Affairs.
4. Copy of the authorized manager's powers in Iraq, noting whether they have the authority to open current accounts.
5. Copy of personal documents of persons authorized to operate the account (Iraqi or foreign). For foreigners, a letter from the Directorate of Residence confirming their Iraqi residence.
6. Copy of the foreign company's latest financial year balance sheet.

Second: Regulations for Opening Current Accounts for Foreign Companies:

1. Letter issued by the foreign company to the bank, signed by the authorized manager, requesting opening a current account, containing names of persons authorized to operate the account, signature samples, and job addresses. Determination of withdrawal powers for authorized persons.
2. Original or certified copy of the establishment license in Iraq issued by the Iraqi Companies Registration Department.
3. Certified copy of the company's establishment contract and internal regulations.
4. Copy of the authorized manager's powers in Iraq, noting authority to open current accounts.
5. Copy of personal documents of persons authorized to operate the account.
6. Copy of the latest financial year balance sheet.

Third: Regulations for Opening Current Accounts for Associations, Unions, Syndicates, Political Parties, Clubs, and Chambers of Commerce:

1. Establishment license issued by the competent government authority.
2. Certified establishment contract and internal regulations of the association or syndicate.
3. Administrative body resolution authorizing signing and granting powers, certified by the competent government authority.
4. Letter issued by the requesting entity to the bank, signed by the relevant manager, stating names and signatures of persons authorized to operate the account.
5. Submission of all evidentiary documents for operators of the account.

Fourth: Regulations for Opening Current Accounts for Diplomatic Entities:

1. Letter issued by the Iraqi Ministry of Foreign Affairs – Protocol Department, confirming opening an account for the embassy or consulate in Iraq, stating the ambassador's full name. (The bank branch must verify the letter's issuance.)
2. Letter issued by the embassy, signed by the ambassador, containing a request to open a current account in the embassy's name.
3. Names of persons authorized to operate the account, signature samples, and job addresses. Determination of withdrawal powers for authorized persons.
4. Copy of the ambassador's personal documents and authorized persons' documents, especially passports and IDs issued by the Iraqi Ministry of Foreign Affairs, with recent photos for each.
5. Letter from the Directorate of Residence confirming that persons mentioned in paragraph (3) have obtained residence in Iraq. (The bank branch must verify the letter's issuance.)

Letters of Guarantee

A commitment issued by the bank upon a customer's request to pay the guarantee letter amount to the beneficiary at first demand without restriction during the validity period, specifying the purpose. It can only be issued by a bank under objective and banking conditions.

Parties to the Letter:

1. The Orderer (Amir): Natural or legal person, bank customer or correspondent (foreign bank or external foreign entity) who issues the guarantee letter according to his order and instructions.
2. The Beneficiary: The entity for whose name or benefit the guarantee letter is issued. Guarantee letters can be issued in the following cases:
   • By internal request for benefit of an entity inside Iraq.
   • By internal request for benefit of an entity outside Iraq.
   • By external request for benefit of an entity inside Iraq.
   • By external request for benefit of an entity outside Iraq.
3. Bid Bond (Initial): Aims to deter companies from submitting a bid and then refusing to sign the contract or failing to provide the required performance guarantee.
4. Performance Guarantee: Required to ensure delivery of goods or services according to contract terms. A claim can be raised based on defects, delays, or if the contractor becomes financially unable to fulfill the contract (insolvency/bankruptcy). Performance guarantee confirms your ability to meet contract requirements.
5. Advance Payment Guarantee: Aims to ensure the advance payment has been used according to the contract's stipulated intentions, helps prevent default on payment, and acts as security for the advance amount.

Procedures

The guarantee letter application is submitted by the Orderer using a special issuance form filled with:

1. Beneficiary name.
2. Orderer name.
3. Guarantee letter amount.
4. Guarantee letter duration.
5. Guarantor name (if applicable, the Orderer must provide a guarantor and record their name in the designated space on the form) under the following conditions:
   a. If the Orderer has no allocated quota for issuing guarantee letters. b. If the Orderer has used all allocated quotas.
   c. If the request cannot be accepted for issuing a guarantee letter due to special reasons related to financial and administrative status.
   d. If the General Administration has stipulated in the facilities confirmation form that a guarantee letter must be issued for a specific person or entity.
6. Purpose of the guarantee letter.
7. Securities: The bank may request cash or in-kind security against issuing the guarantee letter to document the arising obligation. This can be cash securities for the full amount or a specific percentage, greater than the amount, mortgage of shares/bonds, deposit of movable funds, or mortgage of real estate, or the Orderer's waiver of their right to the beneficiary. This is done according to what is recorded in the banking facilities confirmation form.
8. The branch confirms obtaining the Orderer's signature in the designated place, verifying the accuracy of information in the fields above.
9. The branch manager approves issuing the guarantee letter according to conditions in the banking facilities confirmation form or within their prescribed powers, or issues it charged to a customer's dedicated credit with guarantee. The section chief confirms that the amount has been reserved from the customer's quota and is not guaranteed in other cases. General Administration approval can be obtained for specific cases outside the branch manager's authority and limited cases.
10. Each guarantee letter is assigned a special folder upon issuance with a serial number. Guarantee forms have sequential numbers, and the letter number is recorded in all related papers, documents, and request form. A guarantee letter contract is organized based on the form, with the Orderer's (and guarantor's if any) signature obtained and stamp duty collected.

Required Documents

Official documents of the letter applicant (Orderer) and official letters confirming their need for a guarantee letter, if any, issued by the beneficiary entity detailing the required guarantee letter's amount, duration, and type.

Legal Framework & Conditions

Same conditions mentioned in the form signed by the letter applicant, as well as what is recorded in the effective Commercial Law No. (30) of 1984, amended, and what is agreed upon between the Orderer, beneficiary, and bank regarding duration and maturity date.

Documentary Credits

The importer (buyer) bank provides banking guarantees under conditions to the exporter, provided that documents submitted by the exporter comply with all conditions. The exporter (seller) receives a conditional payment guarantee from another bank opening the documentary credit on behalf of the importer. Additional guarantees may also be obtained from another bank known as "enhancement".

Documentary Credit Types:

• At Sight: Most common type, stipulating payment to the beneficiary upon presentation of specified documents.
• Deferred Payment: The seller receives payment at a later date after presenting specified documents. The buyer gains possession of documents (and thus goods/services) before the amount is charged to their account.
• Red Clause: The seller can receive an advance payment of an agreed amount to finance manufacturing or purchase of goods to be shipped under the documentary credit.
• Revolving: The seller receives payment in fixed installments for goods shipped over specific periods.
• Standby: The purpose is the same as a guarantee letter; the beneficiary receives payment upon presenting a simple request.
  Some banks also provide clients with a commercial services team for immediate and technical consultation on drafting and selecting the appropriate documentary credit to meet their business needs.

Procedures:

1. The opening bank submits a credit application form filled with all information, attached with an initial purchase list or contract with the supplier.
2. The application form includes "supplier name, credit amount, goods arrival condition, goods description".
3. The customer's branch is consulted to collect "credit amount + 10%", which is transferred to the securities account for credits.
4. A SWIFT model letter (MT700) is issued to the supplier's bank, which notifies the supplier of the credit.
5. Upon receipt of shipping documents, they are verified to comply with credit conditions. The value of shipping documents is calculated, securities are reflected, and all commissions are collected.
6. Upon acceptance of shipping documents by the opening bank, they are delivered for goods clearance.
7. Follow-up of credit regarding amendments if requested, and monitoring of credit validity.

Required Documents

Import license – Credit opening contract – Credit application form – Insurance document.

Legal Framework & Conditions

Complies with Paragraph (9) of Government Contracts Instructions No. (1) of 2008 for the public sector.

Collection Services

A payment mechanism by which the bank collects payments on behalf of the seller by delivering documents to the buyer. Used when buyer and seller know each other well and have a high degree of trust between them.

Benefits for Seller and Buyer:

• Alternative arrangement other than open account or advance payment, easy and inexpensive.
• Flexibility for both with few formal conditions.
• Goods ownership does not transfer to the buyer until payment or acceptance at a later date by the buyer.
• Directing documents through bank correspondents abroad results in faster document arrival, allowing payment without delay.

Companies and Individuals Services

First: Soft System Service (Page 22)
Second: Western Union Money Transfer Service (Page 23) Third: Investment Portfolio (Page 24)

Islamic Services

1. Savings Account (Page 24)
2. Islamic Deposit Account (Page 24)
3. Murabaha LC (Page 24)
4. Mudaraba (Page 26)
5. Musharaka (Page 26)
6. Istisna' (Page 26)
7. Salam Contracts (Page 26)

Electronic Payment Services

1. KiCard (Page 27)
2. Visa Card (Pages 27-29)
3. MasterCard (Pages 29-34)
   Types of MasterCard Cards:
   1. Platinum (Page 34)
   2. Gold (Page 35)
   3. Classic (Page 35)
   4. Prepaid (Page 36)
      ATM Withdrawal Method (Pages 37-38)
      POS Usage Method (Page 39)
      Special Banking Services for Certain Banks (Page 40)

Mobile Phone Services (Page 42)
ATM Locations (Pages 44-48)
Branches of Banks Operating in the Southern Region (Pages 49-57)