Questions About Practices of Private Iraqi Banks

According to the same brokers, these banks buy hard currency for their customers — who are often relatives of those in upper management — from the central bank to finance their internal and external trade, thereby reaping profits that compensate for the need to engage in bank activities such as giving out loans, lending credit, issuing letters of credit, etc.

Since 2004, the Iraqi Central Bank offers amounts in U.S. dollars to Iraqi markets, through direct auctions, in order to preserve the stability of the Iraqi Dinar in relation to foreign currencies.

A prominent Iraqi financial figure admitted, “Privately held banks have become no more than tools for money exchange.”

Vice President of the Iraqi Parliamentary Finance Committee Ahmed Hassan Faizullah said, “Privately held banks only live off foreign currency auctions.”

Faizullah also added, “I asked one of the managers of the private banks about the reason behind his bank restricting its activity to buying the dollar from the central bank auction and transferring it to specific clients to cover their commercial activities. His answer was that it is easy work with guaranteed profits.”

Upon being asked about the role of his parliamentary finance committee in following up on this issue, Faizullah answered, “As a specialized committee tasked with monitoring national fiscal policy, we cannot do anything about the matter.” He also added, “The major political blocs have no wish to open this subject now.” He then went on to say: “Many of the blocs include figures that are only after narrow economic benefits. These are words I have uttered repeatedly, without fear or shame.”

However, Faizullah made no mention of the names of those involved, nor did he reveal the benefits he believes they are looking to achieve.