Shafaq News..EXCLUSIVE: Iraq probes state banks over liquidity depletion

Shafaq News- Baghdad

Iraq’s Federal Integrity Commission, the country’s anti-corruption
watchdog, and other regulatory bodies are investigating declining liquidity at
state-owned banks, exceptional lending and financing approvals, and the funding
of investment projects, informed sources told Shafaq News on Saturday.

The inquiry covers loans and credit facilities starting at one
billion dinars (≈ $760,000), particularly at state-owned Rafidain and Rasheed
banks, to determine whether they complied with banking regulations.
Investigators are also examining the companies and individuals that benefited,
how the funds were used and the procedures behind exceptional approvals.

Preliminary data currently under audit indicate a “significant
depletion” of liquidity and financial resources at state-owned banks in recent
years, including funds available to Rafidain and Rasheed, according to the
sources.

Some of the files date to the previous government and involve
financial and banking policies and procedures adopted at the time. The
investigation and audit findings will determine the extent of any
responsibility and whether violations occurred.

The regulatory measures, the sources said, come amid financial
challenges facing the state and efforts to strengthen liquidity management,
safeguard the financial resources of government institutions and ensure their
use within established legal and economic frameworks.

The latest inquiry follows a separate Federal Integrity Commission
investigation disclosed earlier this week into contracts signed by state-owned
banks in recent years, along with loans and advances granted to companies and
investors.

In August, a source informed Shafaq News that authorities began a
broader review of several state-owned banks and financial institutions amid a
cash crunch and delays in public-sector salaries, examining alleged misuse of
public funds, declining liquidity and misleading reports submitted by some bank
managers to senior officials.

Prime Minister Ali Al-Zaidi had also ordered a specialized Federal
Board of Supreme Audit team that month to review designated government
contracts before signing, describing inflated project costs as a major source
of corruption.

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