Baghdad – IA – Nassar Al-Hajj
Today, Friday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained the working mechanism by reconsidering the calculation of loan interest, while stressing that all banks are included in the reconsideration of the calculation of loan interest.
Saleh told the (INA): “The decision in which Prime Minister Muhammad Shiaa Al-Sudani directed to reconsider the calculation of loan interest is in the interest of the citizen borrower directly, especially from government banks, by recalculating the annual interest that the banks were charging on the entire amount.” The loan granted to the citizen borrower until the date of full repayment.
He added, “The decision applies to unpaid loan balances, and it is an important directive that will reduce the interest burden imposed on the entire paid and unpaid amount until the date of final repayment of the entire loan, as was the case previously,” indicating that “the fixed method for collecting loan interest (i.e. The cumulative method) introduces unnoticeable complications in collecting the same interest rate, repeatedly due to the method of calculation that was adopted under the prevailing banking practices.
Saleh pointed out that, “starting from this year, the methods of calculating the annual interest on bank loans, especially government loans granted to citizens, have changed, so that the cost of the loan becomes as low as possible when calculating the interest that the loan owner contracted with the bank when granting him the loan,” stressing that “this decision applies to The entire Iraqi banking system, without exception, and all loans granted, including housing loans.”
Prime Minister Muhammad Shiaa Al-Sudani had previously directed a reconsideration of the calculation of interest paid on loans granted to citizens.
A government source told the (INA), “Al-Sudani directed the Ministry of Finance, the Central Bank of Iraq, and government and private banks to reconsider calculating the interest paid on loans granted to citizens using the simple decreasing interest method instead of the cumulative method, which burdens the borrower with burdens on them.” .