Iraqi Banking Sector Plagued by Fraudulent Activities: Report Reveals Alarming Trends

A Sector in Crisis

A recent report has highlighted the rampant fraud in Iraq’s banking sector, threatening the country’s financial stability. Despite having a significant number of banks, the sector contributes only a small percentage to the country’s overall GDP.

The State of the Banking Sector

• There are seven state-owned banks and over 50 private sector-owned banks in Iraq.
• 14 international bank branches operate in the country.
• Cash payments remain the norm, with only 23% of citizens owning a bank account (as of 2017).

Lack of Trust and Confidence

The report attributes the lack of confidence in the banking sector to:

• Inadequate knowledge of cashless payment methods
• Prevalence of fraudulent activities

Types of Fraud

The report highlights several types of fraud that are prevalent in the banking sector, including:

• Identity theft
• Credit card fraud
• Phishing scams

Regulation and Oversight

The lack of adequate regulation and oversight has contributed to the rise of fraudulent activities.

Public Budget for 2021

The country’s public budget for 2021 exhibits a record deficit of 28 trillion IQD (19 billion USD). The majority of the proposed budget income is derived from oil revenues, with provinces receiving varying amounts of spending.

Recommendations for Improvement

To flourish and keep up with global trends, more actions must be taken to:

• Earn the confidence of the Iraqi people
• Move away from cash payments
• Expand the reach of bank branches
• Maintain and renovate bank structures
• Upgrade technical infrastructure

By addressing these issues, Iraq’s banking sector can become a more stable and secure foundation for the country’s economy.