Financial Crime World

Iraq’s Banking Sector on the Path to Stability and Growth

Strengthening Risk Management and Compliance

The Central Bank of Iraq (CBI) has launched several initiatives aimed at strengthening the country’s banking sector and promoting economic growth. In a move to boost confidence in the financial system, the CBI has implemented measures to improve risk management, increase capital buffers, and enhance compliance with international standards.

Key Initiatives:

  • Establishment of Risk Management Units (RMUs) within banks to identify and mitigate potential risks
  • Set up an Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Unit to ensure compliance with international regulations
  • Implementation of Basel II and III recommendations, IFRS auditing standards, and AAOIFI recommendations

Promoting Electronic Payments and Credit Transactions

The CBI has taken steps to promote electronic payments, issuing more than 12 million electronic cards and signing memorandums of understanding with major payment networks such as Visa, MasterCard, and Union Pay. The bank has also launched a credit register system to cover all financial institutions and billing agencies, making it easier to monitor credit transactions.

Supporting Small and Medium-Sized Enterprises (SMEs)

To support SMEs, the CBI has launched a financing initiative worth IQD 6 trillion, which will fund agricultural projects, industrial projects, real estate development, and housing projects. The bank has also updated regulations for financing companies to support MSME and SME projects, and introduced financial leasing activities.

International Recognition

The CBI’s efforts have not gone unnoticed. International rating agencies such as Fitch, Moody’s, S&P, and CI have recognized 19 Iraqi banks, while others are pursuing AML and compliance reports from international auditing firms. The country’s economy is rated B- with a stable outlook by international agencies, and Iraq has fully complied with international AML/CFT regulations.

Attracting Foreign Investment

The CBI believes that these initiatives will not only strengthen the banking sector but also attract foreign investment and promote economic growth. “We are committed to creating a robust and efficient financial system that supports the country’s economic development,” said a spokesperson for the CBI.

Future Prospects

With its strategic banking projects in progress, Iraq is poised to become a major player in the regional and international financial markets. The bank’s efforts have attracted attention from international financial institutions, which are eager to establish correspondent relationships with Iraqi banks.

As the country’s economy continues to grow, the CBI remains committed to ensuring that the banking sector plays its role in promoting stability and prosperity. With its robust regulatory framework and innovative initiatives, Iraq is set to become a major hub for regional and international finance.