Shafaq News- Baghdad

Iraq’s Finance Ministry has ordered an investigation into loans, advances, and declining liquidity, with auditors tasked with identifying potential violations or corruption, according to an official document reviewed by Shafaq News on Monday.

A specialized committee will examine lending files, insurance premiums linked to electronic loans, liquidity levels, overseas branches, investment projects used to secure financial facilities, and contracts. It will also assess documents and guarantees to determine whether approvals met applicable requirements and uncover any irregularities.

Read more: Iraq probes state banks over liquidity depletion

The committee will compile a detailed report outlining its conclusions and the files or entities involved before referring it to the Finance Ministry, Central Bank of Iraq, Federal Board of Supreme Audit, and Federal Integrity Commission for possible action.

The investigation expands scrutiny of insurance payments associated with electronic lending at state-owned banks. An informed source told Shafaq News on Sept. 23 that regulators were tracing how the funds were collected, where they were transferred, which entities managed them, and who ultimately benefited, while assessing whether the arrangements met transparency requirements or involved misuse of public money.

Oversight bodies have also been examining liquidity shortages and exceptional lending approvals. Earlier this month, they began looking into loans and credit facilities worth at least one billion dinars ($763,000), particularly at Rafidain and Rasheed banks, focusing on beneficiaries, guarantees, and investment financing.

The liquidity shortage has already constrained lending, with most state-owned banks suspending loans and salary advances by September. Central Bank data showed deposits falling 5.6% and cash credit declining 5.4% in the first half of 2026.

Read more: Iraq’s private banks: Capital Growth and the structural credit gap