Capital Increase for Al-Rashid Bank: A Strategic Move for Economic Development
On February 13, 2025, Alaa Al-Fahd, an expert in banking and financial affairs, provided insights into the recent decision to increase the capital of Al-Rashid Bank. This move is seen as a significant step in the government’s reform agenda for the banking sector, aimed at enhancing the participation of banks in Iraq’s economic development.
According to Al-Fahd, this capital increase is part of broader reforms being implemented alongside the Central Bank of Iraq, with support from international firms to modernize banking operations and expand the network of bank branches. He emphasized that the original capital of 2 billion dinars was inadequate given the bank’s current scale and the number of stakeholders involved. The enhancement of Al-Rashid Bank’s capital is poised to improve its operational size and efficiency, fostering overall stability in the banking sector.
Al-Fahd remarked, "This increase represents the start of a restructuring process for banks, particularly for Al-Rafidain and Al-Rashid, positioning them to meet the demands of the current economic climate and align with the developmental needs of the Iraqi economy."
In a recent cabinet session, the Federal Cabinet sanctioned the elevation of Al-Rashid Bank’s capital from 2 billion dinars to 50 billion dinars, utilizing reserves from the bank’s expansion fund. This decision mandates the Iraqi Ministry of Finance to undertake the necessary actions for its implementation.
The government’s visible commitment to restructuring initiatives targeting government banks, particularly Al-Rafidain and Al-Rashid, highlights its ambition to transform these entities into modern, efficient financial institutions equipped to cater to the growing demands of the Iraqi economy.
Additionally, the Council of Ministers, in its January 13, 2025 session, resolved to establish a brand-new banking entity leveraging the latest in digital banking technology. This new institution aims to provide comprehensive banking services to both individuals and businesses, domestically and internationally.
Summary of Changes
| Aspect | Previous Capital | New Capital | Purpose |
|---|---|---|---|
| Al-Rashid Bank Capital | 2 billion dinars | 50 billion dinars | Support economic growth and modernization |
By increasing its capital substantially, Al-Rashid Bank is taking proactive steps not only to stabilize itself in the financial landscape but also to contribute meaningfully to Iraq’s economic progress.
