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ISTANBUL, Jul (Reuters) - Libya's former central bank governor Farhat Bengdara said on Saturday a newly formed association of Libyan bankers was preparing recommendations to support the country's rebel leaders in raising finance.
The unofficial International Association of Libyan Bankers met in Istanbul on Saturday, a day after the United States and other world powers recognized the rebel National Transitional Council (NTC) as Libya's government.
Recognition of the rebels, announced by Secretary of State Hillary Clinton at a meeting of the international contact group on Libya, is an important diplomatic step which could unlock billions of dollars in frozen Libyan funds.
Bengdara, who defected in March, said his association would offer support to the NTC in restructuring the Libyan banking sector.
"Firstly it will use the experience of its members in supporting the National Transitional Council in getting finance in foreign and local currency," Bengdara told Reuters after what was the association's second meeting in an Istanbul hotel.
It was not clear how the NTC viewed the association.
U.S. officials have said the decision to extend formal diplomatic recognition to the rebels was an important step in unblocking more than $34 billion in Libyan assets in the United States but said it could still take time to get cash flowing.
Bengdara said his association, which has around 40 members including senior bankers at international banks, was collecting data regarding the Libyan assets abroad.
"In the later stage, when there is a need, the association will help in reforming and rebuilding the Libyan banking sector," he said.
Bengdara said his group, which has not yet elected a chairman, was a non-governmental organization of volunteers but was in contact with the transitional council.
"After today's meeting we will write a list of recommendations to give to the NTC and we will try to arrange a meeting with the executive to give our support," he said.
Bengdara left Libya on Feb 21, traveling to Turkey as there were direct flights and no visa requirements.
"I left the country for a good reason I believe -- that I could not work for a regime that kills its people," Bengdara said, adding he remained officially in office until March 6 when authorities in Tripoli realized he would not return.
Bengdara now spends his time traveling between Europe and the Gulf and said he was a representative of the NTC in Turkey.
He is also a vice chairman of Italy's UniCredit.
Turkish Foreign Minister Ahmet Davutoglu has backed a rebel proposal for the release of $3 billion of frozen Libyan assets to alleviate a "grave" humanitarian situation during Ramadan in areas of Libya controlled by the rebels and by Gaddafi.
In Libya, heavy clashes broke out on Saturday between rebels and forces loyal to Muammar Gaddafi in the Western Mountains as insurgents sought to push toward Tripoli.
Writing by Daren Butler; Editing by Sophie Hares