Iraq’s Banking Sector Reboot: Sweeping Reforms by the Central Bank

 Iraq’s Banking Sector Reboot: Sweeping Reforms by the Central Bank

The Central Bank of Iraq (CBI), with full government support and in partnership with global consulting firm Oliver Wyman, has officially launched a far-reaching reform program for the country’s private banking sector. The aim is to bring Iraq’s banks in line with international standards, modernize infrastructure, boost sector efficiency, and rebuild public and investor trust.

 This comprehensive plan is the product of collaboration between the CBI, the government, and the private sector, and it targets the creation of a resilient, innovative, and sustainable banking system that underpins Iraq’s economic development.

Key Objectives of the Reform:

• Expand and deepen financial inclusion for individuals and businesses across Iraq  

• Enhance the efficiency and productivity of private banks  

• Foster a competitive, fair banking market that can withstand financial and economic shocks

Core Reform Projects:

- Upgrade financial infrastructure, expand branch and ATM networks to improve access

- Develop digital payment systems for fast, reliable banking services

- Streamline anti-money laundering (AML) and counter-terrorism financing (CTF) compliance

- Implement a digital identity system to ensure secure customer verification

- Launch national campaigns to boost public trust and financial literacy

New Banking Standards:

Ownership & Governance:

- Caps on ownership: 10% for individuals/corporations, up to 20% by exception, 60% for institutional investors  

- Aggregated ownership rules to prevent coordinated control  

- Mandatory independent, qualified Boards of Directors; rigorous checks for executives  

- Intensive due diligence for major shareholders to ensure transparency

Business Model & Sustainability:

- Banks must develop detailed, sustainable business plans aligned with Iraq’s needs and adopt new technologies  

- Core banking services should reflect the requirements of the Iraqi economy and its citizens

Financial Metrics:

- Minimum capital adequacy ratio: 12.5%  

- Minimum liquidity coverage ratio: 100%  

- Banks must build resilience to withstand financial shocks

Risk & Regulatory Compliance:

- Full adoption of international AML/CTF frameworks  

- Greater transparency, with robust external audits and oversight of related-party transactions

Implementation Process:  

- Reform will be phased; all private banks will undergo regular evaluations  

- First compliance evaluation set for Q1 2026  

- CBI to issue formal standards, timelines, and launch workshops/technical support soon  

- All licensed banks required to confirm participation in the reform process

Strategic Choices for Banks:  

1. Internal upgrades to meet standards  

2. Mergers/consolidation with other banks for greater strength  

3. Exit the sector (sale or orderly wind-down) for those unable to comply

Impact on Iraq Stock Exchange (ISX):  

- Reforms expected to lift investor confidence, especially among foreign institutions  

- Anticipated rise in bank M&A activity, potentially increasing share prices and trading volume  

- Improved governance, making listed banks more attractive  

- Pressure on weaker banks, driving reform or exit

Conclusion:  

This ambitious reform signals a turning point for Iraqi banking. Backed by government and private sector cooperation, the CBI aims to transform the financial system—making it modern, resilient, transparent, and globally connected. 

The goal: a trustworthy banking environment supporting Iraq’s sustainable growth and opening the door to domestic and international investors.

JON DOWLING: BIG CHANGES AHEAD!!! BE PATIENT!! @DINARREVALUATION #iraqidinar #iraqidinarinvestor

 

The Central Bank of Iraq organizes an introductory workshop for the National Job Day Award

  The Central Bank of Iraq organizes an introductory workshop for the National Job Day Award 

The Central Bank of Iraq organized an introductory workshop on the National Job Day, which honors a number of innovators in various ministries and state institutions.

The workshop was attended by the Executive Director of the National Job Day Initiative at the Prime Minister's Office, Mr. Amjad Al-Khafaji, who reviewed some success stories of Iraqi state employees.

He emphasized that there are 1,275 committees distributed across all civil, military and security departments of the state, with approximately 5,000 employees working under them. They work to select inspiring success stories to be included in the National Job Day award, as the award motivates state employees to be creative.

He emphasized that the award is divided into four sections: the first is for Hope Makers, the second is for Inspirational People, the third is for Dedicated People, and the last is titled the Job Day Initiative, which is the category for state institutions for their employees.

At the end of the workshop, the Director of Women's Empowerment and Head of the Job Day Committee at the Central Bank of Iraq, Ms. Alaa Jamal, was honored.

It is noteworthy that the National Job Day Award aims to highlight the importance of public service and the role of national competencies in building the state.

 Central Bank of Iraq
Media Office
April 23, 2025

https://cbi.iq/news/view/2863

FIREFLY: " They are telling us to go and deposit our 3 zero notes at these ATM machine"

 Frank26  

[Iraq boots-on-the-ground report] 

FIREFLY:Commercials are showing the locations of the new ATMs. 

 They are telling us to go and deposit our 3 zero notes at these ATM machines and at the bank.

  They're taking the 10k, 25k and 50k notes, free deposits, for us to keep our receipts .

 FRANK:  This is what they have to do, collect as many three zeros as possible before they give them the new lower notes...This is all wonderful  news.

MARKZ: BANKS ACCEPTING IQD, VND, IDR : To me this is a great sign we are very close!! #iraq #iqd

 

Banking Sector Update

 Banking Sector Update 

Economic 04/15/2025  Yasser Al-Mutawali  Iraq has recently witnessed significant improvements on the political, economic, and security fronts, which has had a positive impact on attracting foreign and Arab investments, particularly in the banking sector.
 
The increasing presence of foreign and Arab banks in the country is evidence of a recovering investment environment and reflects government efforts to enhance economic stability.
 
Among the most notable positive indicators that have contributed to strengthening the investment environment are regional and international cooperation and Iraq's openness to Arab and international countries.
 
This has boosted investor confidence and encouraged Arab banks to expand their presence in Iraq, which is relied upon to provide advanced financial services, such as trade finance and Islamic banking, in addition to supporting the private sector and joint investments.
 
This step represents the optimal means for global integration through the entry of international banks, reflecting the return of investor confidence in the Iraqi economy.
 
Meanwhile, the Iraqi banking reform process, undertaken by the government to address the challenges facing the banking sector and keep pace with the digital age and international requirements, is proceeding along two parallel tracks.
 
The first involves reforming private banks, led by the Central Bank, and ensuring compliance with international standards and the implementation of anti-money laundering and counter-terrorism financing requirements.
 
This includes lifting the ban on dealing with Iraqi banks and cooperating with international companies to develop the technical infrastructure.
 
The second path is being adopted by the government to modernize state-owned banks, with support from the executive branch.
 
This involves improving efficiency and adopting modern banking systems to reduce corruption, increase transparency, integrate with the private sector, and encourage partnerships between banks.
 
It's worth noting that there are obstacles hindering banking development, including bureaucracy, legal complexities, weak digital infrastructure in some local banks, and the need for qualified human resources to manage modern financial systems.
 
This goal aims to create a modern banking system that supports the national economy.
 
However, complete success requires accelerating reforms to ensure compliance with international standards, transforming Iraq into an attractive financial center that contributes to economic diversification and the creation of new job opportunities, thus strengthening its regional and international standing.
 
In any case, there is no alternative but to integrate with the global financial and banking climate, after comprehensive reform is completed, with the aim of creating a unified national banking market, directing banking credit towards investment, driven by the promising economic stability our country enjoys.   https://alsabaah.iq/112899-.html  

AJ : The Third Strategic Plan of the Central Bank of Iraq (CBI) for 2024–2026

 AJ

The Third Strategic Plan of the Central Bank of Iraq (CBI) for 2024–2026, 

This outlines their plan, includes seven main objectives,

 each with specific sub-objectives, aimed at transforming Iraq’s financial system, 

enhancing stability, and promoting digitalization and inclusion. 2024 2025 2026