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Shafaq News
3 days ago
- Business
- Shafaq News
Iraqi Banking reform: Between necessary change and crippling conditions
Shafaq News Iraq's banking sector is facing one of its most critical junctures in years as the Central Bank of Iraq (CBI) rolls out new reform standards. While the measures aim to modernize the financial system and align it with global practices, economists and lawmakers warn they may be 'impossible to implement' under Iraq's current economic and political conditions. Reform Targets and Investor Reluctance At the center of the new requirements is a mandate for banks to raise their capital to 400 billion dinars (around $306 million) by the end of 2025. The target, however, appears increasingly unrealistic. According to economic expert Ahmad Abed Rabbo, investor reluctance—largely driven by US and international sanctions on dozens of Iraqi banks—makes such capitalization nearly unattainable. Speaking to Shafaq News, Abed Rabbo acknowledged that the reforms contain positive elements but insisted that many conditions require urgent revision. He described the capital increase as 'illogical,' particularly as many banks are barred from dollar transactions, suffer from low market value, and lack robust financial operations. The economist also criticized additional burdens, including $2 million in mandatory service fees for reform consultancy firms approved by the Central Bank. He dismissed the figure as 'exaggerated,' noting that banks had no prior agreement to allocate such sums. Another contested measure is the 10% ownership limit, which he argued deters potential investors, especially when most banks are already loss-making. Abed Rabbo called on the Central Bank to involve private banks in shaping a new reform framework tailored to Iraq's circumstances. Extending the timeline, he said, is essential to prevent forced liquidation or marginalization. 'Reforms are indispensable,' he emphasized, 'but they must be practical and context-driven—not a mechanism for eliminating banks from the financial system.' Strict Standards or Structural Weakness? Economic expert Mustafa al-Faraj described the Central Bank's conditions as 'strict and impossible' in the face of Iraq's fragile financial environment. In comments to Shafaq News, he criticized the lack of direct support from the CBI, saying the institution should prioritize technical and financial assistance, debt rescheduling, lower interest rates, and government-backed incentives before demanding capital hikes or foreign partnerships. He warned that without such support, many banks risk collapse, as the current climate is unsuitable for attracting foreign investors. Instead of strengthening the sector, 'the reforms could accelerate liquidations and forced mergers.' Al-Faraj acknowledged that the Central Bank's intent to reform is genuine but warned the approach is detached from reality: 'If the goal is to establish a resilient banking sector, the starting point must be real support and phased reforms—not measures that paralyze banks before they can recover.' Parliament's Alarm Over Sanctions and Oversight From the legislative side, Kazem al-Shammari, a member of the Parliamentary Economic Committee, pointed to an even deeper problem: sanctions. He revealed that about 30 of Iraq's 70–80 operational banks are currently under sanctions, while most others perform only basic transfer operations rather than comprehensive banking services such as deposits, lending, or financing. Al-Shammari argued that non-sanctioned banks, if properly supervised, could adapt to the reforms. Yet, he cautioned that weak regulatory oversight and political interference remain the biggest obstacles. 'Without effective monitoring, no real results can be achieved,' he said, stressing that government involvement in banking operations contradicts international norms of independence and financial freedom. He further questioned why only Iraqi and Lebanese banks are being penalized for dealings with sanctioned states like Iran, while no other regional institutions have faced similar consequences. 'This issue goes beyond Central Bank policy,' he explained, linking it to broader state-level decisions and political pressure. Between Compliance and Collapse For Al-Shammari, international standards are a double-edged sword. On one hand, compliance could open the door to foreign investment and integration with Gulf and global financial systems. On the other, applying such standards in Iraq's unstable environment risks undermining already fragile institutions. 'If Iraqi banks uphold transparency and integrity, they can attract major global partners and foreign investments,' he predicted, adding that success in this direction could lay the foundation for rebuilding Iraq's financial infrastructure.
Days of Palestine
26-05-2025
- Politics
- Days of Palestine
Dozens of Civilians, Including Children, Burned Alive in Israeli Night Massacres
DaysofPal – At least 29 Palestinian civilians, including 10 children, were burned alive overnight after Israeli forces bombed a UNRWA school in Gaza City sheltering hundreds of displaced people. According to medical sources, dozens more were injured and others remain missing following the pre-dawn strike on Fahmi Al-Jarjawi School in the Al-Daraj neighbourhood of central Gaza. Charred bodies of victims were retrieved from the school grounds, which had been designated as a civilian shelter. Elsewhere, four additional civilians were killed and others wounded when Israeli warplanes bombed a residential home and nearby tents for displaced families on Al-Thawra Street, east of Gaza City. In northern Gaza, Israeli forces carried out a bloody massacre against the Abed Rabbo family in eastern Jabalia, killing 19 members, the majority of them children. Meanwhile, Israeli occupation forces demolished multiple homes in Al-Qarara, northeast of Khan Younis, and continued heavy fire near Nuseirat Refugee Camp in central Gaza. Israeli artillery also shelled the areas of Al-Satar and Al-Qarara, while airstrikes targeted Qizan Al-Najjar and the eastern sectors of Khan Younis. Further destruction was reported in eastern Gaza City, where homes were razed, and an airstrike hit Al-Maghazi refugee camp. Israeli drones opened fire on residential areas in Karama, northwest of Gaza City, and in Al-Bayouk and Abu Saqr neighborhoods in Batn Al-Samin, central Khan Younis. An Israeli ground robot loaded with explosives was also detonated northwest of Beit Lahia, deepening the destruction in the northern Gaza Strip. This escalation comes as the Israeli occupation continues its genocidal war on Gaza for the 598th consecutive day, marked by relentless aerial and ground bombardment. According to the Palestinian Ministry of Health, the death toll since October 7, 2023, has risen to 53,901 martyrs and 122,593 injured, with the majority being women and children. A spokesperson for the World Health Organization stated that Gaza's few remaining operational hospitals are functioning at partial capacity due to a critical shortage of medical personnel and supplies. He urgently called for the opening of border crossings to deliver aid and stressed the immediate need for a ceasefire. Shortlink for this post:
