Syria must open its financial sector to regional and international banks as a crucial step towards economic recovery and rebuilding the country's banking system, a banking expert has said, Al-Watan reported on July 7.

Banking expert Nibal Najma told the newspaper that allowing foreign and regional banks into the Syrian market represents a pivotal move to revitalise the banking system and rebuild the Syrian economy on modern foundations. However, this requires addressing political and economic challenges and implementing serious reforms whilst building strategic partnerships with credible financial institutions.

"The banking sector is the backbone of any economy, and Syria cannot achieve economic recovery without strong and transparent banks," Najma said.

He noted that Syrian banks have suffered major setbacks in recent years, transforming from financing the national economy to performing administrative activities of a service nature. Despite efforts by the new government, confidence in local banks remains weak and the banking infrastructure requires comprehensive modernisation.

Najma said foreign and regional banks possess the financial capacity and operational expertise needed to drive banking modernisation. The entry of these institutions would provide a platform for positive competition and supply the Syrian banking sector with expertise, encouraging local banks to develop their services and improve operational efficiency.

The presence of highly credible financial institutions could help increase investment flows into the country, encouraging Arab and foreign capital to invest in Syria, according to the banking expert.

Despite the lifting of economic sanctions on Syria, challenges remain that hinder foreign bank entry, including weak legal and regulatory infrastructure and security risks. To overcome these obstacles, the country should adopt incentive policies including legislation that guarantees investor rights and provides an effective judicial environment.

Najma stressed that rebuilding Syria's financial sector requires confronting political and economic challenges head-on whilst establishing partnerships with trusted international financial institutions to create a modern, transparent banking system capable of supporting sustainable economic development.

The banking expert's comments come as Syria's new government seeks to attract international investment and rebuild the country's economy following years of conflict and international isolation.