ERBIL, Kurdistan Region of Iraq - Iraq’s Ministry of Finance on Saturday denied allegations circulating on social media and in local media reports that the government withdrew funds from Rafidain and Rasheed banks, calling the claims “false” and “misleading.”

In a statement, the ministry clarified that the funds in question were not citizens’ deposits or banks’ insured reserves but were sovereign accounts belonging to the Ministry of Finance. These funds, it said, had been temporarily placed in the banks as an operational tool and were later moved in accordance with financial and administrative procedures to be reallocated within the federal budget.

“Comparing these measures to bank collapses in other countries is inaccurate and ignores the unique legal and regulatory structure of Iraq’s banking sector,” the statement said, adding that both banks are closely supervised by the Central Bank of Iraq and comply with strict governance and compliance standards.

The ministry stressed that Rafidain and Rasheed banks maintain high liquidity and cash reserves, exceeding the ratios required by the Central Bank. Rafidain Bank’s legal reserve at the Central Bank currently stands at about 9 trillion Iraqi dinars ($6.9 billion), underscoring the bank’s strong financial position, according to the ministry.

Reports alleging that the government had tapped into Rafidain’s reserves to cover liquidity shortfalls were “entirely baseless,” the ministry said, pointing to an official letter from the Central Bank dated April 24 that showed the bank’s unused mandatory reserve was 4.277 trillion dinars, while its used reserve was 4.263 trillion dinars.

“The total reserves of Rafidain Bank at the Central Bank exceed 8.54 trillion dinars and have not been touched in any way or under any pretext,” the ministry stated.

The ministry also addressed past incidents of theft involving trust accounts, attributing them to funds being left idle for long periods, which created vulnerabilities exploited by corruption networks. New oversight measures have since been implemented to mitigate such risks.

The ministry called on citizens to remain vigilant against what it described as disinformation campaigns by some political actors, which it said were aimed at undermining public trust in the government’s financial policies. It also highlighted that international financial institutions have recognized the government's efforts to enhance transparency and improve Iraq’s credit rating, which has spurred investment and job creation.

“The government will continue its economic reform agenda and strengthen the financial and banking sectors, undeterred by baseless accusations,” the statement concluded.

The Finance Ministry urged journalists and social media users to exercise caution and responsibility when discussing financial matters, adding that its doors remain open to anyone wishing to review official data and reports.