Non-performing bank loans, their causes and ways to treat them in Iraq (Al-Rafidain and Al-Rasheed bankers as a model)

Abstract

The process of granting loans from banks is considered as the confidence that you give to customers، but this confidence should not be the main factor adopted by the bank when granting loans، even if these loans were granted according to sound banking foundations and controls that involve significant risks that may The bank is exposed to it due to the customers’ refusal to pay the loan or the interest resulting from it، and this leads to weakening the ability of banks to grant more loans، which are among the most important sources on which they depend in achieving profits and returns for the bank. Therefore، the problem of non-performing bank loans is one of the main problems that Many banks suffer from it، which leads to obstructing the work of these banks، and one of the most important reasons that led to the exacerbation of this problem is the inefficiency of the banking administration، errors in the feasibility study، and the failure to study the integrity of credit decisions when granting loans. In order not to fall into such problems and avoid them، they must be carefully studied and scientific tools and methods should be used with regard to bank guarantees and decisions. The ratio of non-performing loans to the total loans granted to Rafidain Bank (64.31%) in 2015، and for Al-Rasheed Bank، it amounted to (51.20) for the same year، and the reason is due to various factors such as bad loans and debts before (2003) in addition to the two banks granting loans to small projects without guarantees And housing loans، these loans were not repaid، in addition to the security and economic conditions that Iraq was exposed to، which negatively affected the reserves and profits of the two banks through the bank deducting part of the profits it obtains in order to pay off doubtful debts.