Baghdad weighs leadership changes at state-owned banks

Shafaq News- Baghdad

The Iraqi government is considering leadership changes at several state-owned banks over weak services and slow modernization, an informed source told Shafaq News on Saturday.

Managers would be evaluated on institutional development, service improvements, digital transformation, and their ability to expand access to loans, salary advances, and other banking products that could ease financial pressure on citizens and support economic activity.

Administrative measures could follow against managers who fall short, particularly at banks still heavily reliant on paper-based procedures, as Baghdad seeks to strengthen the sector’s contribution to the economy amid mounting fiscal pressures, the source added.

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The potential changes come as the government pursues a broader restructuring of the state banking sector. A government source told Shafaq News in July that the Finance Ministry plans to merge Rafidain Bank with Rasheed Bank and the Cooperative Agricultural Bank with the Industrial Bank, alongside changes to staffing, branch networks, and electronic infrastructure.

Iraq has 81 banks and representative offices, one of the highest totals in the Middle East, according to the Eco Iraq Observatory. Despite the size of the sector, the monitor found that banking services remain below expectations and that the country has no fully integrated digital banks.

Reform efforts also face Iraq’s persistent reliance on cash. Around 87% of the country’s money supply, or roughly 95 trillion dinars (about $72.5B), remained outside the banking system as of June, according to figures provided to Shafaq News by Prime Minister Ali Al-Zaidi’s financial adviser Mudher Mohammed Saleh, limiting funds available for lending and investment.

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