Experts: Banking Reforms Are Necessary To Enhance Financial Stability.
Economic 09/08/2025 Morning: Hussein Faleh The Iraqi banking sector is undergoing a pivotal phase marked by comprehensive reform and institutional development.
The Central Bank, in collaboration with private banks, the government, and the global consulting firm Oliver Wyman, is implementing a strategic plan aimed at enhancing financial stability, diversifying the economy, and gradually transitioning from a cash to a digital economy.
Experts believe these efforts pave the way for ending restrictions on Iraqi banks’ dollar transactions and opening new horizons for the banking sector to achieve sustainable development.
pivotal stage
Economic expert Dr. Mustafa Hantoush explained that”the Central Bank and the banking system are going through a critical phase that could lead to the end of restrictions imposed on Iraqi banks’ dollar transactions.”
He pointed out that “the Central Bank’s decision to extend the deadline for increasing the capital of banks included in the reform to more than two years, instead of the previous deadline of the end of this year, reflects a state of joint cooperation with these banks and supports them in facing challenges.” Hantoush told Al-Sabah:
Final Report
“The Central Bank has contracted with Oliver Wyman to conduct a comprehensive study of the banking sector,” noting that “the company completed its study and submitted its initial report three weeks ago, while the final report was issued recently, including a package of mechanisms to address banking challenges and regulate dollar transactions.
” He added that “these mechanisms are currently under discussion between the Central Bank and the consulting firm,” expecting “the dialogue between the two sides to continue to reach compromises, whether by extending the capital increase period to more than three years, or reducing the required amounts in line with the capabilities of Iraqi banks.”
tangible progress
For his part, Economic and Banking Advisor Samir Al-Nusairi stated that “the measures and efforts led by the Central Bank of Iraq,in cooperation and consultation with private banks, have yielded tangible progress in implementing the objectives, mechanisms, and standards of the comprehensive banking reform project.
This progress is being made in partnership with the government and the global consulting firm Oliver Wyman, and within the framework of the Central Bank’s third strategy.
productive sectors
” Al-Nusairi explained to Al-Sabah that “the project came in response to current economic challenges and an effort to enhance the banking sector’s role in supporting sustainable development by activating non-oil productive sectors, diversifying sources of national income, achieving financial stability and economic growth, regulating foreign trade financing, supporting infrastructure projects for digital transformation, and expanding the use of electronic payment tools to achieve financial inclusion.” Al-Nusairi explained that
international recognition
“the reform and development plan for the banking sector for the period 2025-2028 focuses on
developing the banking system and ensuring its compliance with international banking and accounting standards, building a modern, flexible, and inclusive banking sector, enhancing citizens’ confidence locally, and obtaining international recognition for its transparency and commitment to standard criteria, ensuring the confidence of global correspondent banks.
It also aims to rehabilitate restricted or weakly active banks to enable them to return to full operations. It also aims to focus the role of banks on financing and development lending, enhancing financial inclusion and increasing its percentage.
It also aims to move from a cash economy to a digital economy by withdrawing funds circulating outside the banking cycle – which constitutes approximately 80 percent – and integrating them into the banking system.” Al-Nusairi pointed out that
Evaluation and classification
“what has been achieved during the years 2023, 2024, and until mid-2025 represents ‘ambitious’ levels in building the foundations upon which the reform project is based, which has enabled the evaluation and classification of banks according to their level of achievement of objectives.
” He noted that “there are banks that have achieved remarkable progress, while others still need additional time, while exceptional efforts are being made by the Central Bank and the administrations of some troubled banks to rehabilitate them.”
Central Bank Governor Ali Al-Alaq had previously revealed details of the banking reform plan,
particularly regarding the foreign partner and the plan’s objectives, stressing that the foreign partner is not a condition of the reform plan, while indicating that the banking reform is based on international laws and standards.
Reform plan
Al-Alaq said,”The banking reform plan is not a surprise, but rather a well-thought-out plan, and it took more than a year to develop in coordination with banks and international bodies. It was agreed upon the need to review the Iraqi banking sector after years of practical experience.
” He pointed out that, “After numerous problems emerged, all parties agreed to adopt a plan that would place our banks within international standards and practices, and within the framework of the Central Bank Law and the Iraqi Banking Law. Therefore, the standards are not innovative, but rather stem from the Central Bank Law.” https://alsabaah.iq/120119-.html
The Central Bank Governor Meets With The United Nations Development Programme Representative.
September 08, 2025 His Excellency the Governor of the Central Bank of Iraq, Mr. Ali Mohsen Al-Alaq, met with the new Resident Representative of the United Nations Development Programme in Iraq (Mr. Titon Mitra) at the Central Bank’s headquarters in Baghdad.
The meeting addressed a range of key issues in cooperation between the two parties, focusing on
providing advice on technical aspects and controls related to the regulatory framework for e-commerce, with the goal of working toward consumer protection and enhancing a safe environment for the growth of the digital economy.
During the meeting, His Excellency the Governor reviewed the tangible progress made in the digital transformation of electronic transactions across trade and services, and the reduction of reliance on cash.
He highlighted the importance of cooperation on advisory and technical aspects with various specialized international and regional organizations.
His Excellency also addressed the Central Bank’s plan to reform the banking sector, the key stages it is undergoing, and the cooperation with Oliver Wyman.
Mr. Mitra commended the cooperation between the Central Bank of Iraq and the United Nations Development Programme, pointing out the Central Bank’s reform plan for the banking sector to consolidate the pillars of this important sector, which influences the stability of economic and commercial activity in Iraq. https://cbi.iq/news/view/2976
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