Iraq’s Banking Sector Shows Promising Progress

The Central Bank of Iraq (CBI) has announced a series of strategic banking projects aimed at strengthening the country’s financial sector and promoting economic growth.

Strengthening Financial Sector

According to a CBI statement, the initiatives are designed to increase banks’ capitals, improve compliance measures, and enhance the supervisory authority’s capabilities. The projects also aim to promote electronic payments, corporate governance, and credit registration systems.

Implementing International Standards

One of the key projects is the implementation of Basel II and III recommendations, IFRS auditing standards, and AAOIFI recommendations for banking supervision. This will enable Iraqi banks to increase their assets by more than $100 billion and attract significant economic potential.

Enhancing Credit Registration System

The CBI has also announced plans to launch a credit register system that covers all financial institutions (FIs) and billing agencies in the country. This will help improve the quality of credit data and facilitate lending activities.

Financing Initiatives

In addition, the bank is set to introduce a financing initiative worth IQD 6 trillion (approximately $5 billion) to fund agricultural projects, industrial projects, real estate and housing projects, and small and medium-sized enterprises (SMEs).

International Cooperation

The CBI has also signed memoranda of understanding with international financial institutions to support Iraq’s trade balance. The bank aims to expand corresponding relations with international financial institutions to facilitate cross-border transactions.

Anti-Money Laundering and Combating the Financing of Terrorism

Iraqi banks are now fully compliant with international anti-money laundering and combating the financing of terrorism (AML/CFT) regulations, and 19 banks have been recognized and rated by international rating agencies.

Improving Supervisory Authority

The CBI has also taken steps to improve its supervisory authority, including the establishment of an AML/CFT office and the activation of independent offices in FIs operating within the country. The bank is also working to impose sanctions and financial penalties on non-compliant institutions.

Impact on Economy

The strategic banking projects are expected to have a positive impact on Iraq’s economy, which has been rated B- with a stable outlook by international agencies. The CBI’s efforts aim to promote mutual banking relations and attract foreign investment.

“With these initiatives, we expect to increase our banks’ assets by more than $100 billion and attract significant economic potential,” said an official from the CBI.

“We are committed to promoting financial stability and supporting Iraq’s economic growth.”