SYRIAN BANKING & FINANCIAL SERVICES CONFERENCE SPEECHES

 

Panel Session 2: Opportunities in the Financial Services Sector

Presentation:
Costi F. Chehlaoui
Advisor
Syria Gulf Bank

 

Excellencies, ladies and gentlemen:

It is a pleasure for me to moderate this panel on the opportunities in the financial services sectors. Two and a half years have passed since our last conference in Damascus when the first three private banks had just opened their doors.

Although some skeptics at that time thought that private banks had little future, if any, in Syria, we now have six private banks operating through a branch network serving the needs of their customers in Syrian cities and neighborhoods.

Syria Gulf Bank is the seventh bank to be established and we expect three new Islamic banks to start offering their services next year. A number of foreign institutions have applied and others plan to apply for new banking licenses.

Now those same skeptics are simply questioning the need for all these private banks and why do we need more banks?

My views are that we should welcome well reputed institutions interested in establishing a presence in Syria. I believe this is good for the consumer, the economy and the country as a whole. In order to better appreciate this point, I would like to share with you some statistics that clearly show that Syria is under-banked.

Branch comparison (1000 persons per branch)

Opening branches in Syria is not enough. We should have a culture change so that the average person takes his cash from under the mattress to deposit it in the banking sector.

In fact the new banks, and more recently the older established institutions such as the Commercial Bank of Syria, are doing an excellent job in educating their customers to use and appreciate banking services. This is a most welcome development since it is the only way for people to start using a bank for their financial needs.

Individuals and companies have started to trust banks. This is good news but we still have some way to go before we reach the level of banking sophistication existing in neighboring countries but at least it is a good beginning.

The Central Bank of Syria has in place a clear strategy to reform the banking sector and has introduced internationally accepted procedures that should free this sector from old taboos. The new banking system is a welcome change and will assist the country in its economic development. Syria has an extraordinary reservoir of experienced businessmen, industrialists and entrepreneurs. All what is needed is to allow them to operate freely within a proper environment that facilitates their day-to-day operations rather than restrict their banking activities.

The financial sector enjoys the full support of the government and the reforms introduced by the Central Bank of Syria should further assist the banking industry in the future to operate in a free but well supervised environment that will bring confidence to depositors.

Official government representatives such as the Deputy Prime Minister for economic affairs the Minister of Finance, the Minister of Economy and the Governor of the Central Bank are great proponents of reform and support the concept of market economy.  While some believe the pace is too slow, others believe the change is too fast. Excessive cautiousness is as bad as excessive speed in economic changes. The government pace of reform is steady and is being implemented in a proper fashion that should eliminate or at least minimize any potential economic problems in the future.

There is no doubt about the leadership dedication to reform and their desire to see Syria become an active partner in the world economy.

This alone, however, does not suffice, a point well appreciated by the authorities who are in the process of introducing new legislations to compliment old and new laws. In short the best way forward is for the government to continue the implementation of its strategy of reform. Their objective should be formula that includes the principal of a market economy along side a well managed public sector so that we can meet the challenge of globalization.

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