Integrity probes liquidity drain and 1B+ dinar loans at Rafidain and Rasheed
Baghdad (IraqiNews.com) — The Federal Commission of Integrity and specialized judicial oversight bodies have launched a comprehensive financial audit and investigative probe into liquidity depletion, high-value commercial loans, and discretionary financing waivers across Iraq’s state-owned banking sector on Saturday, September 5, 2026.
The investigation centers on operational practices at Rafidain Bank and Rasheed Bank—the country’s two dominant state lenders—examining major credit facilities exceeding 1 billion IQD (approximately $763,000) granted through non-standard channels or exceptional exemptions.
According to sources close to the regulatory authorities, forensic teams are cross-referencing credit files against statutory central bank lending guidelines to determine civil and administrative culpability:
- High-Value Credit Facilities:Scrutinizing loans and investment financing packages valued from 1 billion IQD upward, assessing whether underwriting criteria and collateral coverage adhered to regulatory standards.
- Beneficiary Audits:Examining corporate structures, political affiliations, and corporate vehicles granted special exemptions, verifying whether funds were directed toward actual commercial assets or converted into speculative cash holdings.
- Historical Policy Tracing: Multiple files under scrutiny date back to policies and executive administrative approvals issued under the previous cabinet and Ministry of Finance administration.
- Misleading Administrative Disclosures: Following up on reports from late August indicating that some bank boards submitted inaccurate or misleading liquidity statements to senior government leadership amid delays in civil service payroll allocations.
Core Areas of the Banking Investigation
| Audit Focus | Investigation Target | Regulatory Objective |
| Credit Packages ≥ 1B IQD | Commercial facilities, corporate overdrafts, and project finance | Confirm collateral solvency and compliance with statutory lending ceilings. |
| Special Clearances | Ministerial waivers and board-level discretionary exemptions | Identify irregular approvals granted outside standard central bank risk frameworks. |
| Liquidity Outflows | Depletion of cash reserves at Rafidain & Rasheed | Trace capital drains that hindered timely public salary disbursements. |
| Corporate Beneficiaries | Corporate borrowers, contracting partners, and individuals | Verify capital deployment in licensed projects versus capital flight or diversion. |
The timing of the banking probe reflects wider liquidity strains on the Iraqi treasury, where public compensation and social welfare spending average over 7.4 trillion IQD monthly:
- State Asset Protection:Authorities are auditing state bank balance sheets to safeguard core public funds, ring-fence depositor capital, and restore disciplined cash management across state commercial institutions.
- Administrative & Legal Recourse:Oversight agencies confirmed that upon concluding the ongoing file audits, formal legal briefs will be submitted to the competent Integrity Investigation Courts to issue asset freezes, travel bans, and arrest warrants against liable officials and irregular borrowers.