Shafaq News / The Central Bank of Iraq has formally requested local and foreign banks to augment their capital or face the possibility of "merging or liquidation" should they fail to comply.
According to a document obtained by Shafaq News Agency, this directive is based on the bank's Board of Directors' decision number 27 of 2023, issued during its 1628th session on July 18, 2023. The decision stipulates that banks must increase their capital to no less than 400 billion dinars by December 31, 2024. This increase is to be made in three installments, with each installment not being less than 50 billion dinars by December 31, 2023, June 30, 2024, and December 31, 2024, respectively.
Furthermore, the document emphasizes that banks can opt for a single installment capital increase by the latest date of December 31, 2023. Additionally, it states that foreign bank branches should enhance their working capital by no less than 60% of their operational capital by December 31, 2023.
Back in 2010, CBI urged banks to raise their capital to 250 billion dinars, and failure to meet the required capital within the specified period would result in the revocation of the bank's license.
CBI has expressed concerns about the credit capabilities and relatively small size of Iraqi banks, urging them on multiple occasions to consider merging as a solution.