05-05-2025
Foreign banks under fire: Iraqi economist slams limited role
Shafaq News/ Foreign banks in Iraq are focused solely on 'profiting from money transfers,' offering little to no contribution to the country's economic development, head of the Iraq al-Mustaqbal Foundation Manar al-Obaidi told Shafaq News on Monday.
'Despite restrictions imposed on some Iraqi banks, money transfers abroad have not declined. The same channels and beneficiaries remain active,' al-Obaidi said.
He rejected claims that continued transfers reflect the superiority of foreign banks over Iraqi ones, asserting instead that these institutions 'do not offer any developmental plans for underserved or remote areas. Their activity is concentrated in commercial hubs for the sole purpose of facilitating transfers.'
Al-Obaidi noted that the combined credit portfolios of foreign banks account for less than 30% of the lending provided by Iraqi banks. 'There are no real financing programs in place for various economic sectors,' he added.
He also accused staff at some foreign banks of engaging in questionable practices to ease transfers. 'Banking decisions are dominated by the managing director or board chairman, with limited institutional oversight,' he said, describing weak governance across several institutions.
In addition to their narrow operational focus, al-Obaidi said the banks lack meaningful digital platforms and have not participated in any vital national projects. 'Foreign banks have not contributed to any initiatives like oil refineries or infrastructure,' he said.
He concluded with a warning, 'These banks rely solely on their links to US correspondent banks. Their operations are built around generating profit from money transfers. If that avenue is closed, they will pack up and return home with profits in hand.'
