Iraqi Member of Parliament Moeen Al-Kadhimi
Media Monitor
Iraqi lawmaker calls banking system underdeveloped, urges reforms
BAGHDAD — Iraqi lawmaker Moeen Al-Kadhimi said the country’s banking system remains in its early stages, citing regulatory issues, limited public trust, and minimal support for key economic sectors.
“The banking system is linked to the Central Bank as the supervisory authority,” Al-Kadhimi said in an interview with Iraqiya TV. “From our perspective as a parliamentary committee, we see that the Iraqi banking system is still in its early stages of keeping up with global systems.”
Al-Kadhimi criticized private banks for focusing on profits from currency transfers rather than contributing to economic development, noting that many had failed to build partnerships with foreign institutions. “Some banks are attempting to profit solely from dollar transfers,” he said.
He also urged the Central Bank to address widespread public distrust, referencing cases in which depositors lost funds after banks went bankrupt. Al-Kadhimi called for enhanced banking services, improved interest rates, and a transition from cash transactions to automated systems.
Excerpts from Moeen Al-Kadhimi’s interview with Iraqiya TV:
The banking system is linked to the Central Bank as the supervisory authority responsible for regulating the work of banks. In the past period, many workshops have been held aimed at developing the banking system.
From our perspective as a parliamentary committee, we see that the Iraqi banking system is still in its early stages of keeping up with global systems. The Central Bank and the Ministry of Finance are required to support the work of banks so they can fulfill their role beyond limited tasks—namely, by supporting the agricultural and industrial sectors and other various economic sectors.
Some banks are attempting to profit solely from dollar transfers, without contributing to other developmental areas. One major concern we have is the increasing establishment of banks without feasibility studies on their founding, even though they are practically non-functional, as most have been unable to establish connections with international banks to conduct financial transfers and thus cannot access the currency auction window.
The Central Bank sometimes justifies certain circumventions of its instructions by private banks. It must also address the broken relationship between the public and the banks. Some citizens have lost their money after some banks declared bankruptcy, and this is another issue the Central Bank must work to resolve.
Improving banking performance is the key. We have addressed the Central Bank regarding the issue of depositing money and the subsequent difficulty depositors face in withdrawing it, along with the need to improve interest rates so depositors see the value. Most importantly, automation processes must be expanded, moving away from cash dealings.
The Ministry of Finance’s monthly priority is converting its dollar balances to dinars to support external transfers and imports, which often involve luxury goods. Traders benefit from the exchange rate difference, and this must stop. The subsidized dollar should be directed toward essential matters, such as importing production lines to reduce future import needs.
