Reforming the banking sector represents one of the most prominent economic challenges facing Iraq at the current stage, given the urgent need to build a robust financial system capable of supporting development, stimulating investment, and enhancing trust between citizens and
banking institutions. Despite the expansion of loan and advance programs, fundamental challenges related to oversight, governance, transparency, and limited reliance on digital technologies continue to hinder the achievement of desired economic goals. Economic experts have emphasized that successful banking reform
requires transitioning from traditional treatments to a modern system based on digitalization and effective oversight, along with developing the legislative and credit infrastructure to ensure funding sustainability and reduce risks. Specialists noted that the loan crisis is not only tied
to the volume of available funding but also to the mechanisms of granting, monitoring, and assessing the creditworthiness of borrowers. This necessitates the creation of unified databases and a modern credit rating system to limit default cases. Achieving fairness in
lending and controlling liquidity requires adopting transparent criteria free from interference, alongside the necessity of expanding financial inclusion to reduce cash circulation outside the banking system. Weak financial oversight has contributed to high default rates, making the enhancement of regulatory
bodies and the activation of governance an essential pillar for addressing these issues. The shift towards digital banking systems, such as electronic payments and digital archiving, is an urgent necessity to reduce bureaucracy and elevate transparency. Ultimately, building a modern
banking sector remains contingent upon political will, professional management, and serious investment in technology to support the national economy and attract investments.
