Parliamentary Committee seeks revision of bank interest rates on loans in Iraq

Shafaq News / Member of the Parliamentary Finance Committee, Mudher Al-Karawi, described on Thursday the bank interest rates imposed by banks on their loans as a heavy financial burden on borrowers, confirming that the Central Bank of Iraq (CBI) and the banks will be summoned to reconsider them.

Al-Karawi told Shafaq News Agency, "The Parliamentary Finance Committee will hold a meeting at the beginning of the legislative term with CBI and the Rafidain and Rasheed banks to study the interests on bank loans and the possibility of reviewing the financial interests, naturally reducing the interest rates to align with the Iraqi social situation, especially for retirees."

He added, "Loans provided to employees, retirees, and those with limited income need to be reconsidered in terms of interest rates based on a mechanism adopted by CBI."

Al-Karawi considered that "the interest imposed on loans constitutes a financial burden that weighs heavily on thousands of families, especially those with limited income and retirees."

Since government banks began offering loans and financial advances, borrowers have complained about the high bank interest rates. Although the official interest rate on loans is 4% of the loan amount, the problem lies in the bank's calculation, where this percentage is multiplied by the number of loan repayment years, resulting in interest reaching up to 50% of the loan amount.

The burden of this interest varies from one loan to another, but it peaks in housing loans, sometimes exceeding 50% of the loan value, depending on the amount and the repayment period.