Iraq heading for digital banking revolution, MEED conference told

The Central Bank of Iraq is pressing ahead with a far-reaching programme of reforms that will help the banking industry play a far greater role in financing trade and investment in Iraq, the MEED Kurdistan Projects conference in Erbil was told this week.

These include effective money-laundering regulations designed to tackle a key issue at the heart of Iraq’s essentially cash-based economy, advisor to the Central Bank of Iraq and Monetics executive director Philip Corper said.

Corper said that central bank plans call for the banking system to move from cash to mobile banking.

“The central bank is introducing a mobile payments system across the whole of Iraq,” Corper said. “This will allow people to use mobile phones to make payments with having a bank account.” The plan has the backing of Asiacell and Zain, Corper said. Korek Telcom is also considering backing the mobile payments programme.

Other plans include the creation of a credit information bureau to monitor borrowing from banks by individuals.

Corper said an electronic payments system is now operating and automated interbank clearing is planned.

“Iraq is going to participate in a regional switch system being developed by the Arab Monetary Fund,” Corper said.

Other initiatives will include the launch of new banknotes later this year to make it harder for money to be forged and a security system for cheques.

Other plans include the introduction of an electronic securities trading system to support the Iraq Stock Exchange and electronic financial reporting.