An Iraqi-American understanding stipulates the return of restricted banks to non-dollar correspondent banking channels.
An Iraqi-American understanding stipulates the return of restricted banks to non-dollar correspondent banking channels.
2026-07-18
Shafaq News – Baghdad/Washington
The media office of Prime Minister Ali al-Zidi announced on Saturday that the Governor of the Central Bank of Iraq, Nizar Nasser Hussein, held a series of high-level meetings with officials at the US Treasury, which resulted in reaching a common understanding to return restricted Iraqi banks to foreign correspondent banking channels not linked to the US dollar.
A statement issued by Al-Zaydi’s media office explained that the lifting of restrictions on those banks came “after they met the approved standards and requirements in the areas of compliance and governance, and completed the first phase of the banking sector reform and relicensing program implemented by the Central Bank of Iraq. Banks that are able to complete the reform and relicensing requirements will regain their eligibility to conduct transactions in US dollars, upon completion of all related regulatory procedures and requirements.”
According to the statement, this understanding comes within the framework of the comprehensive strategy of the Central Bank of Iraq, which aims to modernize the banking sector, enhance its resilience, and improve its efficiency, ability to withstand challenges and competitiveness, thereby contributing to its full integration into the global financial system, strengthening confidence in the banking sector and creating the necessary environment for its openness to international financial institutions.
For its part, the Central Bank of Iraq renewed its commitment to continue the comprehensive evaluation of all Iraqi banks and to strengthen the control and supervision system to ensure sustainable compliance with international standards and the requirements of governance, risk management, and combating money laundering and terrorist financing.
He also affirmed that he “will continue to take appropriate supervisory and regulatory measures against any institution that does not meet these standards, including restricting or suspending its access to international financial channels or revoking its license, whenever necessary, and in accordance with applicable legal and regulatory frameworks.”
In this context, the Governor of the Central Bank of Iraq explained that there are 7 banks currently qualified to return and operate within the external banking correspondent channel not linked to the dollar (other currencies), and to have the right later to deal in the US dollar after passing other stages of compliance and governance requirements.
This came in conjunction with Prime Minister Ali al-Zaidi’s welcoming, earlier on Saturday, of the understanding reached between the Central Bank of Iraq and the US Treasury Department, describing it as “an important step in the path of reforming the banking sector and enhancing its integration into the global financial system.”
It is noted that at the beginning of 2024, an official document issued by the Central Bank of Iraq showed that 8 Iraqi banks were banned from participating in the foreign currency buying and selling window.
The document, which was reviewed by Shafaq News Agency, included a ban on those banks from participating in the foreign currency buying and selling window and from dealing in dollars.
The eight banks are: (Iraqi Investment Bank, Kurdistan International Islamic Bank, Iraqi Union Bank, Al-Huda Bank, Ashur International Investment Bank, South Islamic Bank for Investment and Finance, Arab Islamic Bank, and Hammurabi Commercial Bank).
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