Half of Iraqi private banks grapple with US Treasury ban

Shafaq News / During a meeting with the directors of private banks and the Iraqi Private Banks League, the Parliamentary Economic Industry and Trade Committee revealed that 50% of Iraq's private banks are facing a ban from the US Treasury.

The committee issued a statement outlining the "major challenges and difficulties that private banks are dealing with," such as "having their accounts frozen abroad and being unable to conduct transactions with foreign banks."

The Iraqi Private Banks League said, "They received a letter from the Central Bank of Iraq (CBI) informing them of the ban, but without giving any reasons." Urging the committee "to step in and help them resolve this issue, in collaboration with the Central Bank."

Furthermore, the statement pointed to the ban's negative impact on the Iraqi economy, as private banks hold more than 47% of the assets, 36% of the deposits, and 37% of the capital in the country. Additionally, the banned banks make up 50% of the private banks in Iraq, which directly affects the Iraqi economy's performance.

Meanwhile, the head of the committee, Ahmed Salim Al-Kinani, assured, "The Parliament and the Economic Committee are very concerned about this issue, as it hinders the growth of the Iraqi economy."

He said, "The committee is working closely with the Council of Ministers and the Central Bank of Iraq to find effective solutions that would help lift the ban on these banks."

Earlier this month, the Central Bank of Iraq (CBI) barred 8 Iraqi private banks from participating in the foreign currency sale and purchase window.

The eight banks are Al-Huda Bank, Investment Bank of Iraq, Kurdistan International Islamic Bank, Union Bank of Iraq, Ashur International Bank for Investment, Al-Janoob Islamic Bank for Investment and Finance, al-Arabiya Islamic Bank, and Hammurabi Commercial Bank.

The step came days after the US Treasury imposed sanctions on Al-Huda Bank and its CEO.

In July 2023, Washington also barred 14 Iraqi banks from conducting dollar transactions for the same reasons.

Al Mustashar Islamic Bank, Erbil Bank, World Islamic Bank, and Zain Iraq Islamic Ban are among the banks.