Baghdad: TBI Director Ali Abdul Ridha Alwan announced today, Wednesday, that financial transactions between Iraq and Iran are subject to government procedures involving several entities, noting that more than 85 percent of the cash supply is held outside the banking system.
According to Iraqi News Agency, Alwan, during a dialogue session with several media representatives, responded to questions about financial transactions with Iran amid sanctions imposed on Tehran. He emphasized that the sanctions and economic pressure on Iran, as well as trade between Iraq and Iran, involve many details and are managed by several government entities, including financial authorities, the Ministry of Foreign Affairs, the Central Bank of Iraq, and the Trade Bank of Iraq (TBI). He confirmed that the bank serves as a critical supporting link in this matter.
Alwan explained that the bank works to clarify the nature of these procedures to global banks, highlighting that these measures are essential to the banking system. They are not aimed at targeting customers but ensuring compliance with international standards. He mentioned that some global banks have conducted tests and surveys of Iraqi banks to assess their compliance with required standards, revealing a need for further improvement in aligning with international banking standards.
Alwan emphasized the importance of compliance with legal instructions, Central Bank directives, and financial and regulatory controls to safeguard public funds. He stated that the bank aims to balance supporting the private sector and government while protecting the bank’s and its customers’ funds.
He also addressed the bank’s efforts to recover outstanding debts through legal means, serving to protect public funds and safeguard the reputation of traders and the bank. Alwan dismissed the notion that media reports are responsible for sanctions on Iraqi banks, asserting that U.S. authorities rely on multiple sources, including intelligence, in their decision-making process.
Regarding challenges in the banking sector, Alwan pointed out the issue of weak public confidence due to Iraq’s political and economic crises over the decades. He highlighted that more than 85 percent of the cash supply remains outside the banking system, posing a significant challenge for banks to play their economic role effectively.
Alwan discussed the bank’s development roadmap, indicating that the management is aware of the institution’s strengths and weaknesses. He mentioned that new products and services are being tailored to the Iraqi market’s needs, focusing on remittances, cards, advances, and loans. He noted the limited use of Internet Banking services and stressed the need for further efforts to develop digital banking products and services.
Alwan concluded by mentioning certain constraints the bank faces, such as compliance with government frameworks when purchasing new software or systems, which can limit flexibility in developing banking operations.