Arab Banks' union partners with European institutions to overhaul Syria's troubled banking sector

The Union of Arab Banks (UAB) has announced plans to launch a project aimed at reforming Syria’s banking sector in collaboration with European institutions.

UAB Secretary-General Wissam Fattouh highlighted the serious commitment to implementing the initiative, which is being developed in partnership with the Central Bank of Syria, Caliber.Az reports via Arab media.

Discussions are currently underway regarding the mechanisms for its execution.

Fattouh explained that the challenges facing Syria’s new government stem from the “heavy economic legacy” left by the ousted regime, necessitating fundamental financial sector reforms.

The three-year project will focus on developing banking infrastructure and providing training and capacity-building programmes in cooperation with the German Central Bank.

According to Fattouh, the initiative will also involve establishing specialized asset management companies to handle non-performing loans—a model previously adopted in countries such as the United States and Malaysia. He stressed the need for Syria’s banking sector to strengthen its capital base to address financial risks.

Among the proposed measures to enhance efficiency and restore investor confidence, Fattouh mentioned a gradual approach to privatizing state-owned banks.

He also emphasized the importance of improving internal compliance mechanisms and expanding financial inclusion through digital banking technologies. Moreover, he noted Syria’s ongoing struggles in combating money laundering and terrorism financing, particularly in light of continued international sanctions.

The Union of Arab Banks seeks to foster cooperation among Arab financial institutions, promote economic development in the region, and strengthen their role on the international stage.

By Aghakazim Guliyev