Seven Iraqi banks under US restrictions cleared for return to international banking

Washington (IraqiNews.com) — Seven Iraqi banks that were previously subject to US restrictions that barred them from using international banking channels have been allowed for the first phase of a plan to reconnect them to the global financial system, marking a significant step in Iraq’s banking sector makeover. The Central Bank of Iraq identified the banks – International Development Bank, Al-Janoub Islamic Bank, Mashreq Al-Arabi Bank, Al-Mosul Bank, Kurdistan International Bank for Investment, Investment Bank of Iraq, and Arab Islamic Bank – as eligible to resume correspondent banking relationships under an agreement reached with the US Treasury. The framework, announced after meetings between Central Bank Governor Nizar Hussein and US Treasury officials in Washington, allows member institutions that meet licensing, governance, and compliance criteria to start correspondent banking in non-US dollar currencies. The central bank said it would restore access to US currency transactions only once banks meet extra regulatory, anti-money laundering, and risk management standards. The seven institutions were among Iraqi banks that were denied access to US dollar transactions recently as US authorities increased monitoring of Iraq’s banking system due to compliance flaws and worries about illegal dollar transfers. By linking compliant Iraqi banks with global financial institutions, correspondent banking ties are likely to be restored, which would expedite international commerce, enhance access to cross-border transfers, and attract foreign investment. The Central Bank said that other lenders may become eligible when they complete changes aimed at improving governance, combatting money laundering, and aligning Iraq’s banking sector with international regulatory norms. The post Seven Iraqi banks under US restrictions cleared for return to international banking appeared first on Iraqi News.