Shafaq News- Baghdad

Most Iraqi state-owned banks have stopped issuing loans and salary advances because of limited funding allocations and insufficient liquidity, an informed source told Shafaq News on Thursday.

Read more: Iraq probes state banks over liquidity depletion

Lower deposits have also restricted investment lending for housing complexes and other projects in Baghdad and the provinces. CBI data showed total bank deposits fell 5.6% in the first half of 2026, while cash credit declined 5.4%.

Sources told Shafaq News on September 5 that regulators were examining liquidity levels, exceptional lending approvals, and investment financing at state-owned banks. The Federal Integrity Commission and other oversight bodies were reviewing loans and credit facilities of at least one billion dinars ($763,000), particularly at Rafidain and Rasheed banks.

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