Iraq to end cash payments in government institutions starting July as part of digital overhaul

BAGHDAD — Iraq will ban cash payments in all government institutions starting July 2025 as part of a nationwide push to digitize the economy and modernize the country’s financial system, a senior official said Monday.

Salih Salman, adviser to the prime minister, told the state news agency that Iraq has made “great progress” in adopting electronic payment systems. He said financial inclusion has grown from less than 10% in 2018–2019 to around 40% today, with an estimated 22 to 23 million bank accounts now open and 60,000 to 70,000 point-of-sale devices operating nationwide.

“Cash payments will be banned across government institutions,” Salman said, noting that all transactions will be processed digitally starting next month. He added that public awareness campaigns are underway to encourage a shift from a cash-based culture to digital payments.

The move is part of a broader plan to reform Iraq’s banking sector, long plagued by outdated infrastructure and weak ties to global financial markets.

Salman said international consultancy Ernst & Young has been appointed to restructure several state-owned banks, including the Industrial Bank, the Real Estate Bank, Rafidain Bank, and Rasheed Bank. Separately, the Trade Bank of Iraq has signed an agreement with K2i and KPMG to reform its domestic and international operations in line with global standards.

Rafidain Bank, Iraq’s largest state-owned lender, will be converted into “Rafidain First Bank,” with the government reducing its stake to below 24%. “The remaining shares will be offered to private banks and international investors,” Salman said, adding that the restructuring plan is expected to be finalized and approved by the end of the year.

Additional reforms are planned for Iraq’s private banking sector. Salman said the Central Bank of Iraq has contracted Oliver Wyman to review and advise on the sector over the next two to three years. “This project will result in recommendations for private banks — either to exit the sector, comply with international standards, or merge with other institutions,” he said.

He also pointed to a joint initiative with the central bank called “Ri’ada,” which provides funding and training to small and medium-sized enterprises. The program includes a registration platform through which participants can access training and financing opportunities.

Salman said Iraq remains open to foreign investment and international consulting across legal, financial, accounting, auditing, and compliance sectors. “Government reforms aim to reintegrate Iraqi banks into the global financial system after decades of isolation caused by sanctions and frozen assets,” he said.