Almost Impossible… Iraqi Banks Are Threatened With Closure Due To The Central Bank’s New Conditions.
10 Aug 13:19 Information / Baghdad.. Economic expert Mustafa Hantoush considered on Sunday that the requirement to raise the capital of Iraqi banks to 400 billion dinars, in addition to the necessity of a foreign partner, are “almost impossible conditions” at the current stage, especially with foreign investors reluctant to enter the Iraqi market due to the political and economic instability.
Hantoush told Al-Maalouma, “Implementing these standards requires a more open investment environment and deeper reforms to the economic and legal infrastructure.”
He emphasized that “a number of Iraqi banks provide good services and deserve support and incentives, not strict standards that could lead to their closure.”
Hantoush called on the Central Bank of Iraq to “adopt a gradual reform plan that takes into account the reality of the local market and strikes a balance between protecting the banking sector and stimulating its growth,”emphasizing that “financial policies must focus on enhancing the competitiveness of national banks rather than weakening them.”
This comes amid moves by the Central Bank to grant new licenses to foreign banks, a move some see as an attempt to increase competition and improve services, while others warn it could exacerbate the challenges facing local banks. https://almaalomah.me/news/107043/economy/شبه-مستحيلة-مصارف-عراقية-مهددة-بالإغلاق-بسبب-شروط-البنك-المر
Iraqi Banking Analysis Reveals Troubling Lending Ratios
Business Iraq Jawad Al-Samarraie August 10, 2025 615 The new headquarters of the Central bank of Iraq (CBI). Photo: Zaha Hadid Architects
Baghdad (IraqiNews.com) – A recent analysis of Iraq’s 2025 banking data by economic expert Manar Al-Obaidi has exposed a significant disparity in lending practices, particularly among the nation’s smaller financial institutions.
The report, which is stirring debate within financial circles, raises serious questions about the oversight and effectiveness of the Central Bank of Iraq’s loan initiative.
The analysis categorizes Iraqi banks into three distinct groups based on their credit-to-deposit ratios.
Large banks, with assets exceeding one trillion Iraqi dinars, maintain a stable ratio of 46%,which is
well within international safety standards. However, for medium-sized banks (with assets between 500 billion and one trillion dinars),this ratio jumps to 109%.
The most alarming figures come from small banks (with assets below 500 billion dinars), where the
ratio soars to an astonishing 400%, meaning their loan portfolios are four times the size of their deposits.
To illustrate this disparity, Al-Obaidi’s analysis cites specific examples.
One small bank with just 2.2 billion dinars in deposits extended loans valued at 440 billion dinars.
Another had deposits of only three billion dinars while managing a credit portfolio exceeding 136 billion dinars.
The majority of these loans were sourced from the Central Bank’s 13.5 trillion dinar initiative for small and medium-sized enterprises.
This trend is prompting critical questions:
How were institutions with such a limited deposit base and questionable creditworthiness enabled to manage these massive sums?
What is the nature of the projects being funded, and what is their actual impact on Iraq’s economy and GDP?
Al-Obaidi’s analysis suggests that while the initiative has been in place for over two years, the
loan-granting mechanism needs a comprehensive review.
He also calls for a re-evaluation of banks based on deposits and client base,as well as more rigorous oversight of the small banks that appear to have found a massive opportunity for financial maneuvering without clear standards or accountability.
The analysis concludes with the central and most pressing question:
Who are the real beneficiaries of these loans, and
did the initiative truly achieve the economic goals for which it was launched?
https://www.iraqinews.com/business/iraqi-banking-analysis-lending-ratios-cbi/
By Integrating The Private Sector, An Expert Says Iraq Has The Potential To Attract Hard Currency Through The Tourism Investment Sector.
August 10, 2025 Baghdad/Iraq Observer Economic and financial expert Safwan Qusay asserted that Iraq possesses the potential to increase its attractiveness in the tourism investment sector, given that Iraq currently boasts 12,000 cultural and religious tourist sites, in addition to natural areas.
Qusay told the Iraq Observer, “The Tourism Authority should demand the return of its assets and invest them rationally, involving the regular private sector in the investment sector, whether in hotels, restaurants, or transportation.
Millions of tourists visit Iraq annually, so tourism is a permanent source of income.”
He added that Iraq has an opportunity to connect the holy cities of Najaf and Karbala to Mecca
via a train that could contribute to sustaining tourism revenues throughout the year.
Regarding the path to development, the economic expert explained that “Iraq is looking forward to completing this project, which could contribute to the visit of these tourists and the creation of complementary industries to express the possibility of having crafts and some tools that could contribute to strengthening popular industries, with the aim of creating memories for tourists of their visit to Iraq.”
He continued, “Iraq may have stability in its currency, as tourists spend in different currencies.
This is also a source of income, as they obtain foreign currencies and facilitate their entry into the country and convert them into Iraqi currency in various ways.”
Last April, the Ministry of Culture, Tourism, and Antiquities announced that more than 500 European and American tourists entered Iraq during the past year, and predicted that numbers would increase during the current year, 2025. The Ministry affirmed that
Iraq is witnessing significant tourism development, coupled with economic and political stability.
https://observeriraq.net/عبر-دمج-القطاع-الخاص-خبير-العراق-لديه/
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