The US has imposed sanctions on the Baghdad-based International Development Bank for Investment and Finance, whose current accounts and deposits exceeded 2.6 trillion dinars at the end of March, according to a source inside the Central Bank of Iraq. The Office of Foreign Assets Control (OFAC) added the bank to its sanctions list on 15 October 2026. The source did not say what measures the central bank may take towards the lender.
The listing was part of a package targeting financial networks linked to Iran, and OFAC accused the bank of facilitating Tehran's access to US dollars. The US Treasury Department said the bank used Iranian capital, transferred monthly profits to Iran in dollars and abused a dollar transfer window that has since been abolished. It also accused the lender of maintaining ties with Iranian government entities and pro-Tehran armed factions in Iraq.
LEGAL BASIS AND WIND-DOWN PERIOD
According to the Treasury, the bank was designated under Executive Order 13902 for operating in the financial sector of the Iranian economy. The decision freezes its assets held in the United States.
OFAC issued General License FF on the same day, signed by its director, Bradley. It authorises the wind-down of transactions involving the bank, or entities in which it holds a 50% or greater interest, through 12:01 a.m. EDT on 30 October 2026. Any payment to a blocked person must be made into a blocked account.
DEPOSITS RAISE WITHDRAWAL CONCERNS
The bank's financial statement, published on the Iraqi Securities Commission website, put current accounts and deposits at about 2.65 trillion dinars, or roughly $1.74 billion, as of 31 March 2026.
A source inside the bank estimated that deposits from citizens and merchants stood at around 1.5 trillion dinars, or about $987 million. The source pointed to concerns of a surge in withdrawal requests when business resumed on Sunday morning. Citizens and traders might also head to branches, as happened with Taif Islamic Bank a few weeks earlier.
A RETAIL AND CORPORATE LENDER
The bank offers retail and corporate services, including salary localisation, loans and bank cards. It has said its network reached 32 branches across Iraq and describes itself as one of the country's largest private banks.
OFAC records show the bank was established on 11 January 2011, with its registered address on Arasat Avenue in Karrada, Baghdad. Its SWIFT/BIC code is IDBQIQBA. It opened its first branch in Dubai, in the United Arab Emirates, in December 2023.
DOLLAR CURBS AND THE SECTOR BACKDROP
Iraq has separately banned eight local commercial banks from US dollar transactions to curb fraud, money laundering and other illegal uses of the currency. The banks were barred from the central bank's daily dollar auction, which has been a focal point of a US crackdown on currency smuggling to Iran.
Iraq's banking sector is dominated by state-owned institutions, which hold about 85% of its total assets. The Central Bank of Iraq requires banks to maintain a capital adequacy ratio of at least 12%, above the Basel III minimum of 8%.