EXCLUSIVE: Iraq probes state banks over liquidity depletion
Shafaq News- Baghdad
Iraq’s Federal Integrity Commission, the country’s anti-corruption watchdog, and other regulatory bodies are investigating declining liquidity at state-owned banks, exceptional lending and financing approvals, and the funding of investment projects, informed sources told Shafaq News on Saturday.
The inquiry covers loans and credit facilities starting at one billion dinars (≈ $760,000), particularly at state-owned Rafidain and Rasheed banks, to determine whether they complied with banking regulations. Investigators are also examining the companies and individuals that benefited, how the funds were used and the procedures behind exceptional approvals.
Preliminary data currently under audit indicate a “significant depletion” of liquidity and financial resources at state-owned banks in recent years, including funds available to Rafidain and Rasheed, according to the sources.
Some of the files date to the previous government and involve financial and banking policies and procedures adopted at the time. The investigation and audit findings will determine the extent of any responsibility and whether violations occurred.
The regulatory measures, the sources said, come amid financial challenges facing the state and efforts to strengthen liquidity management, safeguard the financial resources of government institutions and ensure their use within established legal and economic frameworks.
The latest inquiry follows a separate Federal Integrity Commission investigation disclosed earlier this week into contracts signed by state-owned banks in recent years, along with loans and advances granted to companies and investors.
In August, a source informed Shafaq News that authorities began a broader review of several state-owned banks and financial institutions amid a cash crunch and delays in public-sector salaries, examining alleged misuse of public funds, declining liquidity and misleading reports submitted by some bank managers to senior officials.
Prime Minister Ali Al-Zaidi had also ordered a specialized Federal Board of Supreme Audit team that month to review designated government contracts before signing, describing inflated project costs as a major source of corruption.
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