Key Stats and Figures

Banking system:

The current banking system in Iraq consists of 43 banks, in addition to the Central Bank.

Electronic funds transfer (EFT) capabilities:

The nine Iraq banks with full EFT capable banks have almost 200 branches throughout the country.

Iraqi Stock Exchange (ISX):

The ISX launched its electronic trading system in April 2009 and has 91 companies listed with the average trading volume approximately $10 M USD per week.

Sector Overview

The financial services sector is being modernized through comprehensive reforms:

• Major revisions to the tax code.
• Transformation of the Central Bank of Iraq (CBI) into a decentralized institution beginning in 2004.
• Creation of strategic plan for long-term bank consolidation and rehabilitation.
• Introduction of a new currency (New Iraqi Dinar).
• New capital requirements for banks.
• Adoption of an anti-money laundering law (2004).
• Liberalization of domestic interest rates.

Forty-three commercial banks are licensed to operate in Iraq, including seven wholly state-owned banks and three branches of foreign banks.

As Iraq has stabilized, its financial system has grown in both size and focus. The restructuring of the two largest state-owned banks has moved forward and the private banking sector grown rapidly. This progress has been built on the foundation of the stability of the Iraqi Dinar (IQD) and rapidly improving inflation. Iraq’s economy remains primarily cash-based. Most bank income has traditionally derived from fee-based services such as financial transfers. However the burgeoning private banks are increasing intermediation. The volume of commercial bank lending, both corporate and consumer, has doubled since January, 2008.

Iraq’s capital markets are still developing, but are also growing quickly. The Iraqi Stock Exchange (ISX), founded in 2004, already compares well with other regional exchanges in terms of the number of listed companies. The establishment of the Securities Law (2009) and the Iraq Securities Commission (ISC) have helped ensure growing transparency and independence.

The bond market is also young, but beginning to emerge. The Council of Ministers recently approved the issue of the first government paper since before 2003 to help finance infrastructure development.