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Amid the financial and economic pressures facing the Iraqi state, the files of public funds, privileges, double salaries, and reforming the monetary system are returning to the forefront of discussion within the House of Representatives, with a set of proposals aimed at rearranging government spending, tightening control over the wealth of officials, and strengthening the position of the Iraqi dinar.
The video for this My FX Buddies Blog is below here:
The proposals put forward do not stop at amending one law, but open a wider discussion about the form of the state’s financial management, the size of spending on officials, and the extent to which regulatory institutions are able to uncover illicit funds, leading up to a controversial proposal related to removing zeros from the Iraqi currency.
At the forefront of the files is the proposal to amend the Integrity and Illicit Gains Authority Law, with the aim of tightening the procedures for disclosing financial assets and holding accountable those taxpayers who show a large and unjustified increase in their funds.
This issue is of particular importance in a country that has been suffering for years from the challenges of corruption and abuse of power, since combating illicit enrichment does not depend solely on penalties after the violation has occurred, but requires an effective system to monitor the growth of wealth and link financial declarations to banking, real estate and commercial information.
The proposals also aim to tighten procedures against those who refuse to submit financial disclosure statements, with violators being referred to the judiciary if illicit gains are proven.
The most politically and popularly sensitive issue is related to double salaries and financial privileges, where it was proposed to prevent one person from receiving more than one salary under any title, in addition to reorganizing a set of benefits that officials and employees in state institutions receive.
The idea here is based on a simple principle: Citizens cannot be asked to rationalize their spending while the doors of government privileges remain open without clear limits.
In the same context, one of the proposals includes setting a fixed monthly salary for a member of the House of Representatives worth five million dinars, while regulating allowances and privileges, reducing the number of employees, security personnel, escorts and advisors, in addition to controlling the use of government cars and aircraft and subjecting spending to the control of the competent authorities.
These measures, if they are turned into effective legislation and actually implemented, could provide significant sums for the treasury, but at the same time they will face a difficult political test, because reforming privileges often clashes with the interests of those who benefit from them.
In a parallel track, another proposal emerged concerning the reform of the financial and monetary system, which includes combating money laundering, restricting the movement of funds within official banking channels, recovering smuggled funds, and bringing informal capital into the economic cycle.
But the most controversial proposal is to remove zeros from the Iraqi dinar, or what is known as renaming the currency, as part of a broader strategy to reform the monetary system.
Here, a distinction must be made between removing zeros and increasing the real value of the currency. Removing three zeros, for example, does not automatically mean that citizens have become wealthier or that the purchasing power of the dinar has increased; the success of this step depends on economic stability, controlling inflation, managing the money supply, the strength of the banking system, and citizens' confidence in the currency.
Therefore, any project to rename the dinar needs careful study and a clear transition mechanism that ensures there is no confusion in prices, contracts, salaries, savings, and commercial transactions.
The Iraqi problem is not just in the form of the currency, but in an entire economic system that needs simultaneous reforms that include banks, non-oil revenues, government spending, tax evasion, money laundering, the exchange market, and the monetary economy.
Hence, removing zeros, if done alone, may be a mere arithmetic change, whereas if it comes as part of an integrated economic program, it may become part of a broader monetary reform process.
Ultimately, Iraq has an opportunity to reopen the public finance file from a different angle: reducing privileges, combating illicit gains, controlling double salaries, recovering smuggled funds, and reforming the monetary system.
But the success of these ideas will not be measured by the number of proposals that reach parliament, but rather by the state's ability to turn them into fair laws that apply to everyone without exception.
True financial reform does not begin with simply removing three zeros, nor with reducing an official's salary, but rather with building a state that knows where its money goes, who receives it, and how to protect it from waste and corruption.
The real battle is not with the zeros on the currency, but with the zeros in the accounts of oversight and accountability.
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The crisis surrounding the completion of the cabinet and the appointment of ministers to fill vacant portfolios remains unresolved, amidst ongoing political disagreements between blocs and forces regarding the distribution of ministerial positions. This raises questions about the government's ability to implement its program and fulfill its service and economic obligations.
This comes as the government's three-year program has reached the Council of Representatives. MP Mohammed Karim al-Baldawi, spokesperson for the Sadiqun parliamentary bloc, confirmed that the program has been submitted to the Speaker's office, which has referred it to the relevant parliamentary committee for review and feedback before a vote.
In a statement to Al-Maalomah, al-Baldawi said, "The government program for the next three years represents the executive vision for the coming phase, especially as the country is experiencing financial and economic crises that require genuine and realistic reforms to overcome them." He added, "The Council of Representatives is studying the program comprehensively, as its approval will activate the work of parliamentary committees to monitor the implementation of its provisions according to the established timelines."
He added that “the Parliament’s leadership has referred the program to the relevant committee for review and to inform the members and the Speaker of the Council,” noting that “setting a date for the final vote is the responsibility of the Speaker of the House of Representatives, and it is expected that it will not take long to be placed on the agenda as soon as possible.” Meanwhile, the crisis surrounding the vacant ministerial portfolios appears more complex, with no clear indications of an imminent political agreement on the candidates to fill them. This is impacting the performance of the executive branch and its ability to manage files that require fully empowered ministries.
In this context, Member of Parliament, Taqi Nasser, confirmed the absence of any positive signs or clear political horizon for resolving the issue of completing the cabinet, attributing this to the continued disagreements among political forces regarding the vacant portfolios.
Nasser told Al-Maalomah, “The continued postponement of resolving this vital issue constitutes a major obstacle and a clear disruption to executive work, further hindering the implementation of the government program intended to be put into practice.” He added that “keeping the vacant ministries run by acting ministers or without a final decision directly exacerbates the financial and economic crises the country is experiencing, in addition to its negative impact on serving citizens' interests and stalled service projects.” He explained that “the House of Representatives cannot fully exercise its oversight role with an incomplete cabinet.”
The timing of the cabinet dispute, coinciding with the anticipation of the government program's approval, reveals a fundamental problem: the difficulty of translating government pledges and plans into actionable measures without a complete cabinet, especially in ministries directly related to economic and service-related matters.
Observers believe that the continued ministerial vacancies could weaken oversight and accountability mechanisms within the House of Representatives, particularly since parliamentary committees require ministers with full authority to discuss their ministries' plans and question them about progress, spending, and the implementation of the government program. Furthermore, the delay in voting on ministers leaves the management of several important files hostage to political agreements, at a time when the country faces challenges related to the financial situation, the implementation of service projects, and improving the performance of state institutions.
While parliamentary sources indicate the possibility of including the government program on the council's agenda after the relevant committee finalizes its observations, the timing of finalizing the cabinet remains contingent on the progress of understandings between political blocs. This makes completing the government one of the most prominent issues awaiting resolution in the coming period.
MP Taqi Nasser called on all political blocs and forces to "adopt the language of urgent dialogue, prioritize the supreme national interest, and demonstrate a sense of legal and moral responsibility to the Iraqi people to overcome this crisis as soon as possible." He warned that continued disagreements would leave executive and service-related matters vulnerable to obstruction.
Thus, the parliament now faces two parallel tracks: first, studying and approving the government program and activating oversight mechanisms for its implementation; and second, resolving the issue of ministers and filling vacant portfolios. The completion of both tracks is a prerequisite for the government to move from the stage of political consensus to the stage of actual implementation of announced plans and commitments.
Catch up on the latest issue:
Iraq's Banks Are About to Change as Bank Mergers Begin
The Iraqi banking sector is entering a new phase of restructuring and modernization, after the Cabinet approved a plan to develop the banking sector, in a move that is expected to open the door to broad changes in the map of banks operating in the country during the next phase.
The video for this My FX Buddies Blog is below here:
An informed source confirmed to Al-Mustaqilla that the current trend is not limited to developing banking systems and financial services, but also aims to merge a number of banks and reduce the total number of banks operating in Iraq, with the goal of building a sector more capable of complying with international banking and regulatory standards.
According to the source, the Iraqi banking sector has been facing a number of challenges for years, most notably the weakness of some banks, compliance and governance problems, in addition to sanctions and restrictions imposed on a number of Iraqi banks, which has made the issue of reorganizing the sector one of the most sensitive economic issues.
The data circulating indicates that the number of Iraqi banks subject to international banking sanctions or restrictions has reached about 39 out of 81 banks, which reflects the size of the challenges facing the sector reform process, and pushes towards a comprehensive review of the banks’ conditions and their ability to continue.
Merger of state-owned banks
In a notable development, the source revealed that the next phase may also witness the merging of a number of government banks with each other, as part of a move to restructure the government banking sector and reduce the fragmentation and multiplicity of banking institutions.
According to the source, the discussion revolves around the possibility of mergers between government banks in the coming period, with these steps being part of a broader plan to restructure the sector, raise the efficiency of banks, and enhance their financial and administrative capabilities.
If officially approved, mergers are expected to be linked to studies concerning the financial positions of banks, the size of deposits and loans, staff, branches, assets and liabilities, in addition to the ability of the bank resulting from the merger to compete and comply with international standards.
Will the number of banks in Iraq change?
The most prominent question in the next phase will be about the final number of banks that will remain in the Iraqi market.
The new plan may mean a shift from a policy of increasing the number of banks to a policy of focusing on the quality of the bank, its financial strength, and its ability to comply with regulatory standards.
This means that some banks may face the option of merging, while others may have to reorganize, and institutions unable to meet regulatory requirements may face stricter measures.
Observers believe that the success of this step will not be measured solely by the number of banks that will be merged or downsized, but rather by the extent to which the reforms can address the fundamental problems that the sector suffers from, most notably trust, compliance, governance, liquidity, digital transformation, and integration with the global financial system.
pivotal stage
According to informed sources, the Cabinet's approval of the modernization of the banking sector represents the beginning of a process that may be one of the largest restructurings of the Iraqi banking sector in recent years.
The next phase may involve merging banks, reducing their number, restructuring government banks, and tightening work and oversight standards.
However, the final details remain linked to the decisions and procedures that will be issued by the relevant governmental and regulatory bodies, and the extent to which they are implemented on the ground.
If the plan is implemented according to a clear schedule, the Iraqi banking sector may witness in the coming period a transition from a stage of multiple banks to a stage of fewer banks that are stronger, more organized, and more capable of dealing with the international financial system.
this came out aug 10th but I think it goes good with the above article
Iraqi bank reforms could open up sector for regional investors
Last month the Central Bank of Iraq said that seven previously restricted banks had been given permission to reintegrate into the US dollar system. The US treasury has pushed back against the reports – and what the US says in Iraq goes, at least financially.
Previously it has sanctioned Iraqi banks on the grounds that they are used as conduits for Iranian funds. Under UN resolutions, the Federal Reserve Bank of New York still receives Iraqi oil revenues into an escrow account and distributes to Baghdad as and when it sees fit. This, combined with pervasive Iranian influence in Iraq, creates a challenging environment for outsiders.
Iraq has nearly 60 domestic banks including seven state-owned lenders, plus some foreign banks have branches in the country. Public banks provided cash credit, which includes loans, advances and overdrafts, worth IQD57.5 trillion ($44 billion) as of May – nearly four-fifths of the sector total of IQD73.2 trillion.
Hiba Abdulwahhab, a Washington-based researcher, said that the dominance of public banks has limited competition and slowed the development of a diversified and internationally credible financial sector.
“Iraq’s challenge is not to reduce the role of public banks, but to build a private banking sector that is transparent, well-governed, commercially driven and fully compliant with international banking standards.”
The banking sector’s loan-to-deposit ratio was 48 percent as of 2024, far below the regulatory maximum of 75 percent, indicating substantial capacity to expand lending, according to the most recent central bank annual data.
“We’re significantly overbanked for a population that’s significantly underbanked,” said Ahmed Tabaqchali, the Baghdad-born chief strategist at Asia Frontier Capital’s AFC Iraq Fund.
“Loans are a very small part of most banks’ businesses. The biggest opportunity for foreign banks entering Iraq is to expand lending to retail customers, small businesses and corporations. Borrowing levels are extremely low.”
Syndicated infrastructure lending also has big potential, he said, with Iraqi banks generally lacking the deposit base to finance large projects alone.
One constraint is asset quality. Non-performing loans accounted for 17 percent of gross lending in 2024, according to the latest annual central bank data.
“Weak governance, corruption and an underdeveloped legal framework for debt recovery all increase financial risk,” said Abdulwahhab. “As a result, banks become more cautious about lending, which limits credit to the private sector and slows economic growth.”
In contrast, National Bank of Iraq, majority owned by Capital Bank of Jordan, had IQD1.9 trillion ($1.5 billion) of lending in 2024, nearly double that of the next biggest private bank. It is an outlier because it began focusing on lending many years before most competitors, Tabaqchali said.
New regulations may create further openings. Lenders must now have a qualified institutional investor as a major shareholder, which in practice means a well-established foreign financial institution, according to Tabaqchali.
“The banks which are owned or controlled by families or businesspeople involved in the political economy are unlikely to survive in the long term because it’s very difficult for them to meet the new governance requirements,” he said.
“Gulf banks and financial entities could become increasingly interested in Iraq, particularly because of Iraq’s large population, reconstruction needs, energy sector, expanding trade relationships, and underdeveloped banking market,” said Abdulwahhab.
Such investors could bring capital, technology, professional management and compliance expertise, while connecting Iraqi lenders to international markets. But political influence and weak investor protections remain obstacles.
“Gulf institutions will want assurance that Iraqi banks are not controlled by political parties, armed groups or hidden beneficiaries, and that their investments will be protected by a credible legal system,” said Abdulwahhab.
She therefore expects gradual, selective investment through minority stakes, trade-finance arrangements and correspondent relationships rather than rapid expansion.
Tabaqchali said there was interest, most from Middle East banks, to enter Iraq. These lenders “understand the risks better,” he added. “You can never eliminate risk, but you can manage it.”
Qaani Holds Baghdad Talks on Future of Iraqi Armed Groups
Iran's IRGC Quds Force chief meets Coordination Framework leaders as Sept. 30 deadline for state control of weapons approaches
Islamic Revolutionary Guard Corps (IRGC) Quds Force Commander Esmail Qaani has arrived in Baghdad for talks with senior Iraqi political and armed-group leaders, with discussions reportedly focusing on the future of weapons held by factions outside the state security structure.
An informed source told Kurdistan24 that Qaani is leading a high-level military and security delegation and has already met with figures from the Coordination Framework, including Badr Organization leader Hadi al-Amiri, as Baghdad approaches a Sept. 30 deadline to place all weapons under state control.
The unannounced visit comes at a politically sensitive moment for Iraq, where the government is attempting to resolve the status of powerful armed factions while preventing regional tensions from spilling onto Iraqi territory.
Qaani's Baghdad meetings
According to the source, Qaani has held a series of meetings with Coordination Framework leaders and commanders of several armed groups, with further talks expected during his stay.
The discussions are reportedly centered on two major issues: the fate of weapons held by Iraqi armed factions and arrangements concerning Iraq's ability to export oil through the Strait of Hormuz.
The weapons issue has become one of Baghdad's most difficult political and security challenges.
Iraqi political forces have set Sept. 30 as the deadline for bringing weapons exclusively under the authority of the state and its official institutions.
The timing of Qaani's visit has therefore drawn particular attention, as Iran maintains close political and security relationships with several of the Iraqi factions affected by the government's policy.
Baghdad presses for state control
Iraqi government spokesperson Haider al-Aboudi said Monday that no institution or organization should control weapons outside the framework of the state.
Speaking at a press conference, al-Aboudi called for armed groups operating outside official security institutions to return under state authority, saying the process requires a "deep and comprehensive dialogue."
He said there was a high degree of understanding between the government and armed groups and that Baghdad remained committed to advancing and monitoring the process.
The government's position reflects a broader effort to reinforce the authority of Iraqi state institutions amid regional instability and competing security arrangements.
Al-Aboudi also said the government expects the planned September withdrawal of US forces to proceed according to an agreed timetable, with responsibilities transferred to the Iraqi army.
Factions remain divided
Despite Baghdad's push for a unified weapons policy, Iraqi armed factions remain divided over whether and how they should surrender or regularize their arsenals.
Some groups have indicated a willingness to bring their activities into a formal state framework.
Others, including Kata'ib Hezbollah, Harakat al-Nujaba and Kata'ib Sayyid al-Shuhada, have reportedly linked any disarmament to the complete withdrawal of foreign forces from Iraq.
The disagreement presents a significant challenge for the government, particularly as the September deadline draws closer.
The State Administration Coalition has previously warned that armed activity outside state institutions after the deadline could be treated as terrorism, while Iraqi security forces have raised their readiness levels amid concerns over possible escalation.
Iran seeks to contain regional tensions
Qaani's visit also follows heightened tensions involving Iraq, Saudi Arabia and Iran-aligned armed factions.
Abdul Rahman al-Jazairi, head of the political bureau of the Iraqi National Current and a leading Coordination Framework figure, told Kurdistan24 that senior IRGC officials had recently conveyed a message to Hadi al-Amiri urging Iraqi armed groups to halt attacks against Saudi Arabia.
According to Jazairi, the message was directed toward factions including Harakat al-Nujaba, Kata'ib Hezbollah and the group led by Abu Ala al-Walai. He said Tehran was encouraging the factions to pursue political and diplomatic channels rather than military action.
The reported intervention comes as Baghdad prepares for Prime Minister Ali al-Zaidi's expected visit to Saudi Arabia, which Jazairi said would address several sensitive issues, including arms control, the economy and corruption.
The development suggests that the question of Iraqi armed groups is increasingly linked not only to Baghdad's domestic security policy but also to wider regional efforts to prevent Iraq from becoming a launchpad for attacks against neighboring states.
A broader test for Baghdad
The government faces a delicate balancing act: enforcing state authority over weapons while maintaining political support among factions that form an important part of Iraq's governing system.
The issue is further complicated by the future of US forces in Iraq.
Al-Aboudi said the September withdrawal deadline must be respected, while Jazairi separately claimed that undisclosed understandings could link the withdrawal of US forces to guarantees that armed factions keep their weapons under state control and halt drone operations from Iraqi territory.
Those claims have not been independently confirmed.
Qaani's meetings in Baghdad therefore come at a critical juncture. His discussions with Iraqi political and armed-group leaders could influence how Iran-aligned factions respond to the government's September deadline and whether Baghdad can achieve a negotiated transition toward greater state control.
For the Iraqi government, the challenge is no longer simply establishing a legal principle that weapons belong under state authority. It is determining whether that principle can be implemented without triggering a political or security confrontation with factions that retain significant military and political influence.
With the deadline approaching, Qaani's Baghdad talks are likely to be closely watched as Iraq attempts to reconcile the demands of state sovereignty, armed-group influence, the US military presence and the wider regional struggle for influence.
POST PRODUCTION EDIT HERE THIS PART IS LATER IN THE VIDEO I APOLOGIZE FOR THE CONFUSION
Iraq Accelerates System Digitalization to Shield State Funds
Iraq accelerates transition to automated financial systems to secure public revenues.
Focus centers on modernizing customs networks and automating trade procedures.
Talks held with IT specialist Strategy object to adopt global digital solutions.
Implementation tied to firm timelines and performance benchmarks for maximum transparency.
Iraqi Minister of Finance, Faleh Sari, confirmed that the complete digitalization and procedural automation of the nation’s financial systems serves as a core strategy to increase public revenue streams, curb official corruption, and elevate operational efficiency across state institutions.
Key Statements and Focus Area
Eradicating Financial Waste:"Completing the digitalization of financial systems and the automation of procedures represents a fundamental pathway to boosting public revenues, limiting opportunities for corruption and waste, and raising the efficiency of financial performance." —Faleh Sari, Minister of Finance
Ensuring Accountable Execution:"Completing digitalization projects according to clear timelines and adopting performance indicators for each phase ensure a seamless transition from traditional procedures to a digital system that is more accurate, efficient, and transparent." — Faleh Sari, Minister of Finance
Core Focus Areas:
Modernizing border and customs procedures through digital integration.
Replacing manual, error-prone workflows with real-time digital oversight.
Establishing clear, KPI-backed milestones across every phase of system implementation.
High-Level Talks Focus on Customs Automation
The declaration followed a high-level briefing at the Ministry headquarters between Minister Sari, senior officials, including the Ministry’s Undersecretary and the Director General of Information Technology, and a delegation from Strategy object, an international firm specializing in automated governance and IT solutions.
The primary discussions centered on overarching digital transformation projects, with a strong focus on automating Iraq's customs sector. During the session, Strategyobject’s CEO presented a portfolio of successful systems deployment across various international jurisdictions, outlining specialized technical frameworks designed to streamline customs operations and dynamically interface with government financial infrastructure.
Establishing Trackable Milestones for Systemic Transition
Addressing the project trajectory, Minister Sari stressed that the transition away from legacy paper systems depends on adherence to structured deployment timelines. By establishing performance metrics for each phase, the Ministry aims to systematically eliminate loopholes historically exploited for illegal financial gain, ensuring a secure and transparent fiscal system.
FYI
This initiative aligns with Iraq's ongoing push to modernize its fiscal operations and reduce its structural vulnerability to corruption, administrative delays, and lost tax and tariff collection. Iraq has been actively advancing a multi-year digitalization roadmap across its ports and land borders. Central to this overall push is the nation's deployment of modern computerized customs platforms (including UNCTAD's ASYCUDA program), aimed at connecting border cross-points directly to the Central Bank of Iraq, the Ministry of Planning, and tax authorities. Integrating specialized third-party technologies reinforces Iraq’s strategic focus on establishing paperless, transparent, and international-standard commercial operations to stabilize non-oil state revenue.
Upgrading the Iraqi banking sector: A new phase begins with mergers and reducing the number of banks.
The Independent - The Iraqi banking sector is entering a new phase of restructuring and modernization, after the Cabinet approved a plan to develop the banking sector, in a move that is expected to open the door to broad changes in the map of banks operating in the country during the next phase.
An informed source confirmed to Al-Mustaqilla that the current trend is not limited to developing banking systems and financial services, but also aims to merge a number of banks and reduce the total number of banks operating in Iraq, with the goal of building a sector more capable of complying with international banking and regulatory standards.
According to the source, the Iraqi banking sector has been facing a number of challenges for years, most notably the weakness of some banks, compliance and governance problems, in addition to sanctions and restrictions imposed on a number of Iraqi banks, which has made the issue of reorganizing the sector one of the most sensitive economic issues.
The data circulating indicates that the number of Iraqi banks subject to international banking sanctions or restrictions has reached about 39 out of 81 banks, which reflects the size of the challenges facing the sector reform process, and pushes towards a comprehensive review of the banks’ conditions and their ability to continue.
Merger of state-owned banks
In a notable development, the source revealed that the next phase may also witness the merging of a number of government banks with each other, as part of a move to restructure the government banking sector and reduce the fragmentation and multiplicity of banking institutions.
According to the source, the discussion revolves around the possibility of mergers between government banks in the coming period, with these steps being part of a broader plan to restructure the sector, raise the efficiency of banks, and enhance their financial and administrative capabilities.
If officially approved, mergers are expected to be linked to studies concerning the financial positions of banks, the size of deposits and loans, staff, branches, assets and liabilities, in addition to the ability of the bank resulting from the merger to compete and comply with international standards.
Will the number of banks in Iraq change?
The most prominent question in the next phase will be about the final number of banks that will remain in the Iraqi market.
The new plan may mean a shift from a policy of increasing the number of banks to a policy of focusing on the quality of the bank, its financial strength, and its ability to comply with regulatory standards.
This means that some banks may face the option of merging, while others may have to reorganize, and institutions unable to meet regulatory requirements may face stricter measures.
Observers believe that the success of this step will not be measured solely by the number of banks that will be merged or downsized, but rather by the extent to which the reforms can address the fundamental problems that the sector suffers from, most notably trust, compliance, governance, liquidity, digital transformation, and integration with the global financial system.
pivotal stage
According to informed sources, the Cabinet's approval of the modernization of the banking sector represents the beginning of a process that may be one of the largest restructurings of the Iraqi banking sector in recent years.
The next phase may involve merging banks, reducing their number, restructuring government banks, and tightening work and oversight standards.
However, the final details remain linked to the decisions and procedures that will be issued by the relevant governmental and regulatory bodies, and the extent to which they are implemented on the ground.
If the plan is implemented according to a clear schedule, the Iraqi banking sector may witness in the coming period a transition from a stage of multiple banks to a stage of fewer banks that are stronger, more organized, and more capable of dealing with the international financial system.
this came out aug 10th but I think it goes good with the above article
Iraqi bank reforms could open up sector for regional investors
Last month the Central Bank of Iraq said that seven previously restricted banks had been given permission to reintegrate into the US dollar system. The US treasury has pushed back against the reports – and what the US says in Iraq goes, at least financially.
Previously it has sanctioned Iraqi banks on the grounds that they are used as conduits for Iranian funds. Under UN resolutions, the Federal Reserve Bank of New York still receives Iraqi oil revenues into an escrow account and distributes to Baghdad as and when it sees fit. This, combined with pervasive Iranian influence in Iraq, creates a challenging environment for outsiders.
Iraq has nearly 60 domestic banks including seven state-owned lenders, plus some foreign banks have branches in the country. Public banks provided cash credit, which includes loans, advances and overdrafts, worth IQD57.5 trillion ($44 billion) as of May – nearly four-fifths of the sector total of IQD73.2 trillion.
Hiba Abdulwahhab, a Washington-based researcher, said that the dominance of public banks has limited competition and slowed the development of a diversified and internationally credible financial sector.
“Iraq’s challenge is not to reduce the role of public banks, but to build a private banking sector that is transparent, well-governed, commercially driven and fully compliant with international banking standards.”
The banking sector’s loan-to-deposit ratio was 48 percent as of 2024, far below the regulatory maximum of 75 percent, indicating substantial capacity to expand lending, according to the most recent central bank annual data.
“We’re significantly overbanked for a population that’s significantly underbanked,” said Ahmed Tabaqchali, the Baghdad-born chief strategist at Asia Frontier Capital’s AFC Iraq Fund.
“Loans are a very small part of most banks’ businesses. The biggest opportunity for foreign banks entering Iraq is to expand lending to retail customers, small businesses and corporations. Borrowing levels are extremely low.”
Syndicated infrastructure lending also has big potential, he said, with Iraqi banks generally lacking the deposit base to finance large projects alone.
One constraint is asset quality. Non-performing loans accounted for 17 percent of gross lending in 2024, according to the latest annual central bank data.
“Weak governance, corruption and an underdeveloped legal framework for debt recovery all increase financial risk,” said Abdulwahhab. “As a result, banks become more cautious about lending, which limits credit to the private sector and slows economic growth.”
In contrast, National Bank of Iraq, majority owned by Capital Bank of Jordan, had IQD1.9 trillion ($1.5 billion) of lending in 2024, nearly double that of the next biggest private bank. It is an outlier because it began focusing on lending many years before most competitors, Tabaqchali said.
New regulations may create further openings. Lenders must now have a qualified institutional investor as a major shareholder, which in practice means a well-established foreign financial institution, according to Tabaqchali.
“The banks which are owned or controlled by families or businesspeople involved in the political economy are unlikely to survive in the long term because it’s very difficult for them to meet the new governance requirements,” he said.
“Gulf banks and financial entities could become increasingly interested in Iraq, particularly because of Iraq’s large population, reconstruction needs, energy sector, expanding trade relationships, and underdeveloped banking market,” said Abdulwahhab.
Such investors could bring capital, technology, professional management and compliance expertise, while connecting Iraqi lenders to international markets. But political influence and weak investor protections remain obstacles.
“Gulf institutions will want assurance that Iraqi banks are not controlled by political parties, armed groups or hidden beneficiaries, and that their investments will be protected by a credible legal system,” said Abdulwahhab.
She therefore expects gradual, selective investment through minority stakes, trade-finance arrangements and correspondent relationships rather than rapid expansion.
Tabaqchali said there was interest, most from Middle East banks, to enter Iraq. These lenders “understand the risks better,” he added. “You can never eliminate risk, but you can manage it.”
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Prime Minister Ali al-Zaidi confirmed on Wednesday evening to US Central Command chief Charles Brad Cooper that Iraq will be free of any foreign military presence on October 1st.
Al-Zaydi’s media office stated in a statement received by Shafaq News Agency that during his meeting with the CENTCOM commander, he emphasized the commitment to the agreed-upon timelines, which stipulate that September 30th will be a fixed and final date for ending the international coalition’s military mission in Iraq and completing the departure of its forces.
He explained that the first of next October will be "a new day in the course of the Iraqi state, as Iraq will be free of any foreign military presence, and will have completed its national sovereignty over its lands, and continued to build its security and military capabilities, enabling it to protect its security and stability on its own."
In this context, the Prime Minister called for adherence to the principles of the constitution and the constants upon which the state is based, preserving its supreme interests, and directing the energies of the people towards construction, reconstruction and development, stressing that Iraq today needs the efforts of all its people to build a strong economy, a stable state, and a better future for future generations.
He stressed that restricting weapons to the state, in accordance with the law, protects everyone, strengthens the state’s authority and sovereignty, ensures security and stability, and represents a fundamental condition for moving Iraq to a new stage of development and prosperity.
Both sides confirmed the full and final agreement to end the military mission of the international coalition, in accordance with what was agreed upon during the Prime Minister's visit to Washington in mid-July.
They stressed that Iraqi-American relations will move towards cooperation and partnership in the economic, developmental and security fields, based on mutual respect for sovereignty and the common interests of the two countries.
Earlier today, during his chairmanship of a meeting of the National Security Council, Al-Zaydi confirmed that the decision to end the mission of the international coalition in Iraq on September 30 is a final and irreversible date, and stressed the implementation of the highest level of security plans, support for internal stability, and guaranteeing national sovereignty.
Iraqi Prime Minister Meets CENTCOM Chief Over Coalition Withdrawal
Prime Minister Ali Faleh al-Zaidi meets with U.S. CENTCOM Commander Charles Brad Cooper.
Sept. 30 confirmed as the final deadline to end the international coalition's military mission.
Oct. 1 set to mark full national sovereignty with zero foreign military presence.
Transition shifts U.S.-Iraq relations toward economic, security, and development partnerships.
Iraqi Prime Minister Ali Faleh al-Zaidi received the Commander of United States Central Command, General Charles Brad Cooper, on Wednesday, explicitly confirming September 30 as the final, non-negotiable deadline for ending the military mission of the U.S.-led international coalition and completing the exit of foreign troops from Iraqi territory.
Key Statements and Focus Area
Firm Exit Deadline: "September 30 will be a fixed and final date for ending the military mission of the international coalition in Iraq and completing the departure of its forces," Prime Minister Ali Faleh al-Zaidi declared during the bilateral meeting.
Full Sovereignty Reclaimed: "October 1 will be a new day in the trajectory of the Iraqi state, Iraq will be free of any foreign military presence, having completed its full national sovereignty and built up its security capabilities to protect its own stability," al-Zaidi stated.
Monopoly on Arms: "Restricting arms exclusively to the hand of the state under the law protects everyone, strengthens state authority, and serves as an essential prerequisite for Iraq's transition toward development and prosperity," the Prime Minister emphasized.
Bilateral Strategic Shift: "Iraqi-American relations will transition toward cooperation and partnership across economic, developmental, and security domains based on mutual respect for sovereignty," both parties affirmed.
Commitment to Final Withdrawal Schedule
During high-level talks in Baghdad, Prime Minister Ali Faleh al-Zaidi and CENTCOM Commander Charles Brad Cooper reviewed the logistical and operational framework governing the international coalition's drawdown. The Iraqi government emphasized strict adherence to the agreed-upon timelines established during al-Zaidi's mid-July visit to Washington. Both sides confirmed that the mission to defeat ISIS in its current military configuration will officially conclude by September 30, paving the way for complete territorial independence.
National Governance and Domestic Security
Prime Minister al-Zaidi framed the impending departure of foreign troops as a critical moment for internal reform and constitutional adherence. Calling on the Iraqi population to direct their energies toward economic construction and development, al-Zaidi underlined that enforcing state control over weaponry is vital to ensuring long-term political stability. The Prime Minister stressed that consolidating military authority solely under state institutions protects national interests and establishes the foundation for sustainable prosperity.
Future Framework of U.S.-Iraq Relations
Both delegations agreed that the conclusion of the coalition's combat role does not signal an end to bilateral engagement, but rather a structural transformation. In alignment with previous diplomatic understandings reached in Washington, future ties between Iraq and the United States will focus on bilateral security arrangements, joint economic development, and institutional capacity-building built upon shared interests and mutual respect for national sovereignty.
FYI
The announcement marks the culmination of multi-year negotiations conducted via the U.S.-Iraq Higher Military Commission (HMC), established to evaluate the operational status of ISIS, environmental risks, and local security force capabilities. As part of a phased transition agreement finalized earlier in 2026, the military footprint of the Combined Joint Task Force – Operation Inherent Resolve (CJTF-OIR) is scheduled to wind down in Iraq by late 2026, while advisory and security cooperation activities in neighboring Syria will remain operational through mid-2027 to prevent any resurgence of the extremist group across the border.
Baghdad and Erbil resolve the "ASYCUDA" dispute... Border crossingsenter a new customs phase
The Interior Minister of the Kurdistan Regional Government, Reber Ahmed, announced that Erbil and Baghdad have reached a final agreement on the implementation of the ASYCUDA global system and the sharing of customs revenues, while criticizing the federal government's "hesitation" in compensating the victims of the attacks that targeted the region, stressing that the resumption of oil production is linked to providing air defense systems and security guarantees for foreign companies.
In a press statement, Reber Ahmed explained that the implementation of the ASYCUDA customs system came under the direct supervision of the Prime Minister of the region, Masrour Barzani, and after a series of intensive meetings.
He noted that the last point of contention regarding the distribution of border crossing revenues has been resolved, as it was agreed, in accordance with the constitution, to distribute them at a rate of 50% to Erbil and 50% to Baghdad.
In this context, Iraqi parliament member Ghalib Muhammad, from the Al-Mawqif bloc, believes that there are several benefits to implementing the ASYCUDA system at the region's border crossings.
He explained to Al-Mada that "the first expected benefit is reducing the time and costs associated with the entry of goods. Instead of relying on paper transactions and multiple procedures, customs data becomes electronic, and a large part of the transactions can be completed through the system."
He added that "the second benefit relates to transparency and the electronic recording of data, which reduces the scope of human intervention in determining fees and procedures, and allows for clearer tracking of customs transactions, which can limit manipulation and customs evasion, enhance the fight against corruption, and end the state of chaos in the management of Kurdistan's ports."
He stressed that "the most important benefit is the increase in public revenues. When the movement of goods and the fees due on them become clearer, the state can collect revenues better, especially since the region has more than 20 border crossings."
AFP, citing two Iraqi sources
Al-Zaydi's message to the factions: Confrontation and clashes if the deadline expires without weapons being surrendered
An Iraqi security official revealed to AFP on Wednesday (August 12, 2026) that he had been in contact with the Iranian Revolutionary Guard regarding armed factions and limiting their weapons to the Iraqi state, while two political sources reported that Prime Minister Ali al-Zubaidi had informed political leaders of his readiness to “confront” and “clash” with factions that refuse to cooperate after the deadline expires.
The Iraqi security official told AFP, as reported by 964 Network, that “communication is currently taking place with the Iranian Revolutionary Guard at a high level, and is being conducted intensively regarding the factions and limiting their weapons” to the Iraqi state.
Two Iraqi political sources told AFP that al-Zaidi informed political leaders of his readiness for “confrontation” and “clash” with the factions that cling to their weapons, should they insist on refusing to cooperate after the deadline expires.
Informed sources revealed to Asharq Al-Awsat newspaper the outlines of a forthcoming government plan to encircle and restrict the movement of armed factions' strongholds after the deadline for weapons collection expires on September 30, with the aim of gradually dismantling them and avoiding direct clashes. The newspaper's report, published today, Wednesday (August 12, 2026), stated that security forces will impose a tight cordon around the factions' headquarters without armed confrontation, noting that the main focus will be on Jurf al-Sakhr, the stronghold of "Kataib Hezbollah," and Jurf al-Nadaf, the stronghold of "Harakat al-Nujaba," amidst Iranian pressure to obstruct or postpone the plan.
The President of the Kurdistan Region, Nechirvan Barzani, revealed that Prime Minister Ali Zaidi asked him to speak with Iranian officials about restricting weapons during his recent visit to Tehran, revealing that the Iranian side officially informed him of its readiness to help Baghdad in this matter.
Barzani explained, in an interview with journalist Hisham Ali, which was followed by 964 Network, “The Iranian officials told me: Tell Prime Minister Zaidi, we are ready to help him in this matter,” noting that he asked them: “Is this your official position?” They said: “Yes, this is our official position.”
Regarding linking the issue of restricting weapons to the American position, Barzani said, “The issue of restricting weapons to the state is not an obligation to America, but rather an obligation to Iraq,” adding, “America came to this country one day, and one day it will leave, but we are the ones who will remain in Iraq. We are the people of Iraq and we will remain here.”
He pointed out that “the Kurdistan region has been bombed a thousand times, and Iraqi security headquarters inside Baghdad have been bombed,” asking: “Why do we link the issue of restricting weapons to America?”
Barzani warned of the repercussions of the continued presence of armed factions, saying: “I say to all political forces and the Iraqi people, I swear that if Iraq does not resolve the issue of armed factions, it will face international isolation and will also be subjected to regional isolation.”
He added, “Arab countries and neighboring countries want to help Iraq, and I know how much the Gulf countries want to invest in Iraq, but this is not happening in this way.”
Weapons control precedes cabinet formation... US-Iranian dispute leaves al-Zaydi's government incomplete
Iraqi Prime Minister Ali al-Zaidi's efforts to complete his government are faltering, amid political talk of an American "veto" affecting the names of candidates nominated to fill nine vacant portfolios, including defense, interior, higher education, and planning.
While Al-Zaydi announced that the cabinet was nearing completion, political sources indicate that the crisis could extend for months, after the disputes over ministerial quotas escalated into a larger conflict related to weapons and the influence of factions.
Sources within the “coordination framework” say that US envoy Tom Barrack has drawn red lines on a number of candidates, especially representatives of armed factions, while Washington had previously informed al-Zaydi during his last visit that it refused to allow figures linked to the factions to assume ministerial positions.
According to the sources, the reservations include names from different powers, which has created a state of confusion within the framework regarding the limits of the American position.
The crisis does not stop at the factions; data indicates that Washington also does not want to grant ministerial positions to figures from political forces that it considers part of the Iranian influence equation, while the possibility of keeping the Ministries of Defense and Interior under the direct management of al-Zaydi is being raised.
The American priority seems to be related more to limiting weapons and countering Tehran's influence than to the speed of completing the government.
In contrast, political sources speak of Iranian moves to obstruct the process of dissolving the factions.
Observers believe that al-Zaidi's announcement that his government is nearing completion may be a cover for the difficulty of reaching an understanding with Tehran regarding weapons.
Intensive efforts to join the World Trade Organization
Iraq has made significant progress in its bid to join the World Trade Organization, after completing a number of key files related to goods and services and responding to questions from member states, in preparation for holding the fourth meeting of the working group on Iraq’s accession to the organization.
The official spokesman for the Ministry of Trade, Mohammed Hanoun, said that a delegation from the ministry visited the headquarters of the World Trade Organization last July, and held a series of official meetings with officials of the organization, the secretariat, and the head of the working group on Iraq, in addition to representatives of a number of member states.
Hannon added that the visit saw the resolution of key files related to goods and services, as well as the completion of answers to the 175 questions from member states, in addition to other files related to the memorandum on the foreign trade system, agriculture, technical barriers to trade, health and phytosanitary procedures, and other technical files related to the requirements for accession.
He explained that the member states welcomed the achievement made by Iraq in submitting these files, noting that, in light of the meetings that continued for a full week at the organization’s headquarters, the files were adopted, officially circulated, and published on the World Trade Organization’s website, to allow member states to review them, make their comments, and negotiate them.
Hannon explained that work is currently underway to arrange an official visit by the Minister of Trade, who is also the head of the National Committee concerned with Iraq’s accession to the World Trade Organization, to the organization’s headquarters, with the aim of holding official meetings and discussions in preparation for holding the fourth meeting of the working group on Iraq’s accession in the coming period.
He pointed out that the upcoming meeting represents an important milestone in the course of negotiations, as it is hoped that it will contribute to resolving the remaining issues and negotiations and completing the required procedures leading to Iraq’s accession as a full member of the World Trade Organization.
In the same context, Hanoun pointed out that Baghdad is simultaneously witnessing the holding of a technical workshop with the participation of international experts, with the aim of fully preparing for the fourth meeting of the working group, as well as preparing the Iraqi negotiating team from a technical standpoint and enabling it to complete negotiations with the member states.
This development comes at a time when the Ministry of Trade and relevant government agencies are continuing to work on completing the technical and legislative requirements related to the accession process, which will enhance Iraq's integration into the global trading system and open the way for expanding its trade relations. With the member states.
He warned of international isolation threatening Iraq
Nechirvan Barzani: I came from Tehran with a message to restrict weapons... The state pays both the Popular Mobilization Forces and the factions.
The President of the Kurdistan Region, Nechirvan Barzani, revealed that Prime Minister Ali Zaidi asked him to speak with Iranian officials about restricting weapons during his recent visit to Tehran, revealing that the Iranian side officially informed him of its readiness to help Baghdad in this matter.
Barzani explained, in an interview with journalist Hisham Ali, which was followed by 964 Network , “The Iranian officials told me: Tell Prime Minister Zaidi, we are ready to help him in this matter,” noting that he asked them: “Is this your official position?” They said: “Yes, this is our official position.”
The Popular Mobilization Forces and factions
Regarding the Kurdistan Region’s position on the Popular Mobilization Forces, Barzani explained that the region “has special respect for the sacrifices of the Popular Mobilization Forces and the Iraqi army, along with their Peshmerga comrades in Kurdistan, who are defending the Iraqi people.”
In response to a question about his view of the difference between the Popular Mobilization Forces and the factions, Barzani said: “Many times when we visit Baghdad, we talk about the difference between the Popular Mobilization Forces and the factions, but ultimately, the factions or the Popular Mobilization Forces, their budget comes from the Iraqi state.”
He added that the region’s position on the factions “is not that we are against these factions, but the fundamental question is: Where is Iraq headed? We are all in the same boat, whether in Baghdad, Basra or Zakho, and we see that these actions carried out by the factions are not in the interest of Iraq or its future.”
He continued: “These factions threaten neighboring countries and attack Arab countries with drones. Is it reasonable for there to be a force inside Iraq that is a source of threat to neighboring countries? In addition, it is a source of threat to the Kurdistan Region.”
Who rules Iraq?
Regarding the government program and the restriction of weapons, Barzani said, “The government program presented by Prime Minister Ali al-Zaidi clearly states: Weapons must be restricted to the state,” considering that these forces “must be under the umbrella of the Commander-in-Chief of the Armed Forces.”
Therefore, Barzani asked: “Who rules in Iraq? Is it the Prime Minister? Is it the political forces that rule? Or are they outlaw groups?”
International and regional isolation
Regarding linking the issue of restricting weapons to the American position, Barzani said, “The issue of restricting weapons to the state is not an obligation to America, but rather an obligation to Iraq,” adding, “America came to this country one day, and one day it will leave, but we are the ones who will remain in Iraq. We are the people of Iraq and we will remain here.”
He pointed out that “the Kurdistan region has been bombed a thousand times, and Iraqi security headquarters inside Baghdad have been bombed,” asking: “Why do we link the issue of restricting weapons to America?”
Barzani warned of the repercussions of the continued presence of armed factions, saying: “I say to all political forces and the Iraqi people, I swear that if Iraq does not resolve the issue of armed factions, it will face international isolation and will also be subjected to regional isolation.”
He added, “Arab countries and neighboring countries want to help Iraq, and I know how much the Gulf countries want to invest in Iraq, but this is not happening in this way.”
We know who is bombing Kurdistan
Regarding the attacks targeting the Kurdistan Region, Barzani said that “most of the bombing operations were launched from inside Iraq, and some attacks were launched from Iran during the forty-day war.”
He explained that “the attacks from inside Iraq were launched from Mosul, Kirkuk, Salah al-Din and Tal Afar,” adding: “We have 100% information about the parties carrying out these attacks, and we even know the units that carry out these attacks, and this information is very accurate.”
Kurdistan Region to Halt Cash Salaries by August 31 Deadline
Cash-based payroll distribution in the Kurdistan Region concludes this month.
The MyAccount project urges 25,000 unregistered employees to expedite their enrollment.
The federal government and the KRG have agreed to terminate cash-based payrolls.
Cash salary distribution for public sector employees will be completely halted in the Kurdistan Region after August 31; approximately 150,000 public sector bank cards have not yet been collected by beneficiaries.
Key Statements and Focus Area
In an official statement, the MyAccount project warned public sector employees that cash salary distribution will no longer be available after August 31 of this year.
Any employee without a bank card will face difficulties receiving their financial dues.
In terms of logistical preparations and distribution status, the MyAccount project management stated that 80,000 finalized bank cards are currently stationed at state-run banks, calling on account holders to collect their respective cards before the end-of-month deadline.
Distribution updates and mandatory pickup schedules specifying the designated holding branch will be communicated exclusively to public sector employees through direct SMS notifications.
For beneficiaries who have not yet received this correspondence, project officials confirmed that automated text alerts will be dispatched incrementally over the next three weeks.
Furthermore, the specialized hotline 1991 has been fully activated as a dedicated customer support center tasked with handling inbound inquiries and resolving individual card issuance issues.
FYI
MyAccount, a digital payroll initiative, was launched by the Kurdistan Regional Government in September 2023 to transition public sector workers from cash payments to electronic bank deposits.
According to the agreement between Erbil and Baghdad, the salary distribution system is shifting, and cash will no longer be disbursed for payroll.
This marks the final deadline for approximately 25,000 employees who have not yet registered in the project.
The project emphasizes that collecting bank cards before August 31 is the only way to protect employees' salaries from being suspended by the federal government.
Mazhar Mohammad Saleh: There Will Be No Budget in 2026
This year, is there a budget or is there no budget? Will it end in ’26? No, no, there isn’t. No ’26 — there is no budget. The alternative is the Federal Financial Management Law No. 6 of 2019 (as amended), which allows spending of one-twelfth (1/12) or less of the actual current expenditures from the [previous] year.
Robot visits Morning Show set
Al-Sudani pushes for a new law to restrict weapons in Iraq
Six weeks remain until the end of the deadline for restricting weapons that Iraqi Prime Minister Ali Al-Zaydi set for himself, having pledged to achieve it.In front of the White House, Al-Zaydi is again pushing for the preparation of a draft law on restricting weapons, without providing details on the content of the new law. However, some leaks indicate that the expected draft includes strict legal measures, such as classifying any armed activity or the use of drones without prior government approval as terrorist acts — something the Ministry of Interior has already confirmed it is adopting.
While it is still early to pass the law, there is talk of a settlement formula under which the armed factions would hand over their military arsenal exclusively to the Popular Mobilization Forces (Hashd al-Shaabi), as the official state institution. However, factions such as Harakat al-Nujaba and Kataib Hezbollah continue to reject complete disarmament at present.Meanwhile, discussions are circulating in Iraqi political circles about negotiations being conducted by the factions to obtain legal and political guarantees that would protect their leaders and members from future judicial prosecutions after handing over their weapons.
The issue of restricting weapons and Al-Zaydi’s call to enact a law on this matter has gained greater momentum following the State Administration Coalition’s announcement of a firm position that, for the first time, adopts a tough tone toward the factions that retain their weapons. It classifies any armed activity after the end of the government deadline as terrorist acts.This allows Al-Zaydi to take another step toward fulfilling his pledges, despite the stalled efforts to complete his government amid talk of an American veto that has affected the names of candidates nominated for nine vacant portfolios, including Defense, Interior, Higher Education, and Planning, in addition to the position of Deputy Prime Minister.
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