Banks reluctant to start operating in Iraq over security concerns are being over-cautious and missing out on a lucrative opportunity to develop a "virgin land", the managing director of an Iraqi bank said on Sunday.
The Iraqi government has so far issued licences to three international banks. National Bank of Kuwait and two British banks, Standard Chartered and HSBC have been told they will have their banking permits withdrawn if they do not establish themselves by the end of the year.
Continuing instability in Iraq, coupled with attacks on HSBC offices in Turkey, has cooled enthusiasm for setting up shop.
But bankers say the country is in desperate need of the minimum $25 million in capital each bank pledged to invest.
"The security threats are being exaggerated," Abdul Aziz Hassoun, director of Iraq's North Bank, told Reuters at a meeting of regional bankers in Dubai.