Kurdistan PM Masrour Barzani hails fivefold growth in banking sector through digital salary initiative

ERBIL — Kurdistan Region Prime Minister Masrour Barzani announced Tuesday that the region’s banking sector has experienced fivefold growth over the past 10 months, attributing this expansion to the success of the “My Account” initiative.

Speaking at the Hi-Tech Expo in Erbil, Barzani emphasized that the “My Account” project, which focuses on distributing salaries to civil servants, has been crucial in modernizing financial services and restoring confidence in the banking system. “Our banking system is stronger and more efficient than ever,” Barzani said. “In just 10 months, we have achieved fivefold growth, proving the effectiveness of our strategy.”

Barzani also highlighted the rapid digitalization of salary payments for public sector employees as a key achievement of the initiative. “Over 120,000 employees are now receiving their salaries digitally, and by next month, this number will exceed 200,000,” he explained. “This will result in nearly $200 million being transferred into bank accounts, a process that now takes only one day with private banks, compared to the previous week-long duration.”

He defended the ambitious goal of enrolling one million public sector employees in the banking system within a year, calling it a “challenging but essential step” toward economic modernization. “Currently, 200 ATMs have been installed across the region, and this number is expected to increase to 1,000,” he added.

Launched in February of last year, the “My Account” initiative aims to include all public sector workers and retirees in a comprehensive digital banking system. The Kurdistan Regional Government described it as “a comprehensive financial program that provides a secure and convenient way to pay the salaries of employees, security forces, and retirees.”

Yesterday, the KRG announced that salary payments would be deposited in bank accounts with Central Bank of Iraq-licensed banks operating in the Kurdistan Region. Employees have been allowed to choose their preferred banks to encourage retail competition. As of early 2024, participating banks included Cihan Bank, RT Bank, National Bank of Iraq, BBAC Bank, and Iraqi Islamic Bank, all part of the CBI’s Tawteen program, which encompasses 43 banks, including Rafidain Bank and Rasheed Bank.

In February, the Federal Supreme Court ruled that the salaries of Kurdistan Region employees should be paid directly by Baghdad, rather than through the KRG using its share of the federal budget. Some opponents argue that they lack trust in the banking system in the Kurdistan region and fear potential bank failures or bankruptcies.

To address these concerns, the KRG announced in July that the Iraqi Deposit Insurance Company, which is dedicated to maintaining confidence in the banking sector and protecting public deposits, had formally endorsed the “My Account” project. The statement declared, “The eight participating banks in the ‘My Account’ project are guaranteed by our company.”

The Iraqi Deposit Insurance Company stated, “Our primary goal is to strengthen confidence in the banking sector by ensuring financial stability, addressing liquidity issues, supporting banks during financial distress, and safeguarding public deposits.”