Source: Al-Sudani directs financial reforms, halting capital increases for US-sanctioned banks

Shafaq News/ Iraqi Prime Minister Mohammed Shia Al-Sudani issued directives related to financial and banking reforms, including a halt on capital increases for banks subject to US sanctions, a government source revealed on Thursday.

The source told Shafaq News Agency, "Al-Sudani, before leaving for New York, held a series of meetings with banks and the Central Bank of Iraq (CBI), where the discussions detailed the CBI's plan to rehabilitate private banks through contracting with an international consulting firm."

The PM emphasized the importance of the development plan for private banks, to be implemented by Oliver Wyman company, ensuring clarity in terms of timelines, distribution of responsibilities, and the issuance of progress reports.

Al-Sudadi’s directives included accelerating the implementation of the Economic Ministerial Council recommendations to support Iraqi banks, notably by postponing capital increases for banks restricted from dollar transactions by the US Treasury.

The source also indicated that “Al-Sudani instructed the preparation of a study to activate the local card project and encouraged Iraqi ministries and institutions to increase their dealings with licensed Iraqi banks for various banking services and to open accounts with them.”

On Monday, Al-Sudani received US Deputy Treasury Secretary Wally Adeyemo and several officials from the Treasury Department, where Adeyemo reaffirmed support for the CBI and PM's reform agenda aimed at improving the country's economic landscape.

The PM emphasized that the government has made significant progress in financial and banking reforms, completing 95% of banking transfers through the electronic platform, with the remaining 5% to be finalized by the end of 2024.

In turn, Adeyemo expressed readiness for cooperation and partnership to advance economic development.