The Coalition Provisional Authority (CPA) hereby issues a Request for Proposals for long-term management contracts at Iraq’s t

Request for Information (RFI) Iraqi Commercial Banks Background The Coalition Provisional Authority (CPA) hereby issues a Request for Information (RFI) related to a possible future Request for Proposals (RFP) involving the management of Iraq’s two largest commercial banks – Rafidain Bank and Rasheed Bank. The aim is to help both banks to restructure in order to become commercially viable entities that are able to operate successfully within a market economy. The Request for Information seeks expert views from global financial and management entities interested in helping to manage the Rafidain and Rasheed banks through management contracts. The RFI is specifically directed toward institutions with sufficient size and strength to undertake these contracts themselves. Issues to be addressed in the Request for Information include near-term, day-to-day operational issues of the banks as well as the need to put into place a longer-term strategic business plan. The Request for Information is an important part of CPA’s efforts, working in close cooperation with Iraqis, to advance a wide-ranging economic reform program in Iraq aimed at: (i) modernizing the country’s financial system, (ii) building a new foundation for the banking system that is based on sound market principles, (iii) fully implementing measures among Iraq’s banks that are consistent with international best practices in all aspects of commercial bank operations, and (iv) allowing Iraq to realize its unique potential for economic growth to the greatest extent possible. Following several decades of centralized economic control, Iraq’s economy has been weakened but maintains significant growth potential owing to its abundant natural and human resources. Oil production will account for an important part of Iraq’s future GDP. However, Iraq’s non-oil sectors, including tourism, agriculture, and small enterprise, also represent potentially vibrant sectors of Iraq’s economy with strong growth prospects. Iraq’s two largest banks – Rafidain Bank and Rasheed Bank – are likely to play key roles in Iraq’s economic reconstruction due to their long-standing presence in Iraq, their substantial shares of overall banking system assets and deposits, and the extensive customer base and branch networks each bank maintains in the country. Reliable data about the financial condition of both banks, however, remain scarce. Under Iraq’s previous regime, Rafidain and Rasheed banks operated under the direct control of the country’s political leadership, extending resources to public enterprises and supporting projects favored by Baath Party officials. Through many years of government-directed activities, the technical capacity of the banks to operate based on sound credit policies and asset/liability management practices has been harmed. Request for Information The CPA is interested in obtaining views on how a management entity might: (1) Develop and implement a new, market-oriented business strategy at each bank; (2) Implement essential reforms, including the prioritization of these reforms; (3) Create a "good bank/bad bank" structure at each bank; (4) Improve the management of branches at each bank; (5) Outsource, twin, or employ other means of bank assistance used in transitional, post-conflict countries, including "lessons learned" from these experiences; (6) Strengthen loan valuation and problem loan collection ability; (7) Encourage small and medium-sized enterprise lending; (8) Develop new lending and borrowing instruments; (9) Develop a reliable, long-term private deposit base; (10) Develop a consumer credit market in Iraq; (11) Facilitate the inflow of remittances into Iraq through the banking sector; (12) Facilitate the development of a viable capital market within Iraq; (13) Create an incentive system for bank management that is consistent with sound corporate governance and is in the long-term financial interest of each bank; (14) Establish performance evaluation benchmarks for individual banks. Additional issues may also be addressed at the discretion of those responding to this Request for Information. Submissions should be professionally presented and forwarded to rfimc@do.treas.gov . Inquiries and questions may also be submitted to this address. CPA’s preference is for the submission of responses within two weeks from this date of posting, though all submissions provided through the close of business on August 30, 2003, will be considered. Following a detailed review of the submissions received, the Coalition Provisional Authority may directly contact particular entities to further discuss their recommendations. Submissions should include the full names of all individuals who contributed to the recommendations, their exact titles, the names of the institutions for which they work or are associated, and all necessary contact information.