18 Islamic Banks Banned From Dealing In Dollars…And Liquidation Looms!
July 8, 2025 Last updated: July 8, 2025 Al-Mustaqillah/- In a move that sparked widespread controversy within economic circles, data from the Central Bank of Iraq revealed the inclusion of a group of Islamic banks on a list of banks prohibited from dealing in dollars.
This raised questions about the true reasons and motives behind this move, as well as the repercussions it could cast a shadow over the future of these banks and the Islamic financial sector as a whole.
List Of Banks Covered By The Ban:
Elaph Islamic
Kurdistan International Islamic Bank
Islamic Cooperation
Islamic Giving
Islamic Advisor
Islamic world
Islamic South
Islamic Arabic
Light of Islamic Iraq
Zain Iraq Islamic
International Islamic
Islamic Clutch
Al-Ansari Islamic Bank
International Islamic Trust
Al Rajhi Islamic
Islamic paper
Asia Islamic Iraq
Islamic Spectrum
Islamic money
What Are The Reasons For The Ban?
Despite the absence of an official, explicit explanation from the Central Bank,
informed sources point to several possible reasons, most notably:
Suspicions of dollar smuggling are now being leveled against several Iraqi banks as Washington and Baghdad seek to control the black market and reduce currency smuggling to neighboring countries.
Failure to comply with international financial compliance standards, particularly those related to anti-money laundering and counter-terrorist financing (AML/CFT) standards.
Some of these banks are linked to names or entities subject to US sanctions, which automatically places them under suspicion,even without an official announcement from the US Treasury Department.
The weakness of internal control systems in some of these banks makes them fertile ground for violations or illegal uses of the dollar.
Serious Repercussions: Liquidation Is Imminent?
According to an informed economic source for Al-Mustaqilla,
some banned Islamic banks may be headed for voluntary or forced liquidation in the coming period,
given their inability to continue financial operations without dealing in dollars.
The dollar is a vital nerve in the Iraqi economy, whether for trade, transfers, or international client obligations.
What Does This Mean For The Islamic Financial Sector?
Declining trust: Customers may lose confidence in Islamic banks in general,
even those not covered by the ban.
Increased pressure on other banks: As these banks exit the dollar market,
customers will turn to other banks, potentially causing congestion or pressure on their services.
Implications for investors: Especially those who use these banks as intermediaries to finance projects or investments based on foreign currency.
Where Are Things Headed?
The ball is now in the court of the Central Bank of Iraq, which is expected to provide an official and transparent explanation of the reasons behind the ban, to ensure it does not create a financial panic and reassure the local market and investors.
Islamic banks subject to the ban must also take the initiative to quickly settle their legal and commercial situations and work to improve compliance systems, to avoid escalating the situation to the point of liquidation or cancellation of the license.
https://mustaqila.com/حظر-18-مصرفاً-إسلامياً-من-التعامل-بالدول/
New Banking Sanctions Shake Iraq’s Financial Sector Amid Mounting US Pressure.
Iraqi investment in the grip of the US dollar. July 8, 2025 Last updated: July 8, 2025
Al-Mustaqilla/ – The Central Bank of Iraq announced the inclusion of a number of investment banks on a list of those banned from dealing in US dollars,
a move that sparked widespread concern in economic and financial circles and brought to the forefront old questions about the future of the Iraqi banking system in light of growing international pressure.
List Of Banks Covered By The Ban
The list published by the Central Bank on its official website included 12 private investment banks, the most prominent of which are:
Middle East Iraqi Investment Bank
Iraqi Investment Bank
Dar Al Salam Investment
Babylon consumption
Sumer Commercial Bank
Mosul Bank for Development and Investment
Union Bank of Iraq
Ashur International Investment Bank
Trans-Iraq Investment Bank
Al-Huda Bank
Erbil Investment and Finance Bank
Hammurabi Commercial Bank
US Pressure And Undeclared Sanctions
Although the Central Bank has not issued an official explanation regarding the reasons for the ban,
an informed source told Al -Mustaqilla that the decision is linked to indirect US sanctions,
based on suspicions regarding these banks’ failure to comply with anti-money laundering and foreign transfer standards, in addition to their weak financial compliance systems.
The source explained that some of these banks may face liquidation in the near term,
as a result of international isolation and the freezing of their dollar transactions,
which will make it more difficult for them to continue operating in the local market.
Attempts To Comply And Return To The Global Financial System
In contrast, some of the banned banks have begun taking steps to rectify their situation.
They are working to improve their compliance and internal control systems, contracting with international financial audit firms, and seeking to open channels of negotiation with US and international entities to ease the measures imposed on them.
Worrying Repercussions For The Iraqi Market
The decision directly impacted the Iraqi market, particularly with regard to investor confidence,
project financing, and imports.
Among The Most Significant Potential Repercussions:
The dollar exchange rate rose on the parallel market as a result of reducing the number of banks allowed to trade it.
The banking sector’s ability to finance major investment projects has declined.
Withdrawal of local and foreign capital in search of a more stable financial environment
Urgent Banking Reforms To Avoid Collapse
Observers believe that what is happening does not amount to a passing crisis, but rather represents a critical test of the Iraqi financial system’s ability to reform and remain within the global financial system.
In this context, the need to implement radical reforms, including
Updating the legal structure of banking supervision
Enhancing transparency and financial disclosure
Re-evaluating the role of investment banks in the national economy
The Window For Reform Is Narrowing
Recent developments confirm that Iraq stands at a critical financial crossroads,
requiring clear political and banking will to implement genuine reforms before the banking system loses what remains of internal and external confidence. https://mustaqila.com/عقوبات-مصرفية-جديدة-تهز-القطاع-المالي/
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