ERBIL, Kurdistan Region - Trade Bank of Iraq (TBI), which is owned by the Iraqi government, on Wednesday announced that it will start offering banking services to the Kurdistan Regional Government’s (KRG) civil servants, allowing them to receive their salaries through the bank.
Six private banks are involved in offering digital banking services to the KRG’s over a million public employees. The federal government has shouldered the payment of the employees since the beginning of this year but has yet to agree to continue the process through the KRG initiative, known as My Account. Baghdad wants to apply its own banking initiative, Tawtin (localization).
TBI said in a statement on Wednesday that it will start the process of Tawtin for the KRG salaries once the Kurdish government submits the lists of the names of its civil servants.
Following its weekly meeting, the KRG said in a statement on Wednesday that the TBI has “joined” six other banks to carry out the My Account initiative but the federally-owned bank made no mention of the initiative in its statement, instead using the word Tawtin - a process the KRG has campaigned against.
KRG pays the salaries of almost all of its civil servants in cash, causing further delays. Some pensioners have lost their lives while waiting in long lines in front of banks during pay days. It often takes the government more than a week to disperse the salaries.
The cash-strapped KRG has failed to pay the salaries of its civil servants in full and on time for years due to a financial crisis which was worsened when an arbitration court ruling brought its oil exports to a halt in March last year.
The Iraqi Supreme Federal Court earlier this year ruled that Baghdad should pay the salaries of KRG employees, ordering “localization” of the salaries. It later allowed the federal government to continue the payment of the KRG employees in cash until the digitization process was completed.
KRG claims that its initiative is much better than Tawtin because it offers more services.
Baghdad has yet to send the April salaries of KRG’s employees.
KRG Prime Minister Masrour Barzani said during the last weekly meeting of his cabinet that Erbil has met the federal government’s demands, calling on Baghdad to send the Region’s financial entitlements. The KRG has repeatedly accused Baghdad of not making regular payments of its share of federal funds.
Six private banks are involved in offering digital banking services to the KRG’s over a million public employees. The federal government has shouldered the payment of the employees since the beginning of this year but has yet to agree to continue the process through the KRG initiative, known as My Account. Baghdad wants to apply its own banking initiative, Tawtin (localization).
TBI said in a statement on Wednesday that it will start the process of Tawtin for the KRG salaries once the Kurdish government submits the lists of the names of its civil servants.
Following its weekly meeting, the KRG said in a statement on Wednesday that the TBI has “joined” six other banks to carry out the My Account initiative but the federally-owned bank made no mention of the initiative in its statement, instead using the word Tawtin - a process the KRG has campaigned against.
KRG pays the salaries of almost all of its civil servants in cash, causing further delays. Some pensioners have lost their lives while waiting in long lines in front of banks during pay days. It often takes the government more than a week to disperse the salaries.
The cash-strapped KRG has failed to pay the salaries of its civil servants in full and on time for years due to a financial crisis which was worsened when an arbitration court ruling brought its oil exports to a halt in March last year.
The Iraqi Supreme Federal Court earlier this year ruled that Baghdad should pay the salaries of KRG employees, ordering “localization” of the salaries. It later allowed the federal government to continue the payment of the KRG employees in cash until the digitization process was completed.
KRG claims that its initiative is much better than Tawtin because it offers more services.
Baghdad has yet to send the April salaries of KRG’s employees.
KRG Prime Minister Masrour Barzani said during the last weekly meeting of his cabinet that Erbil has met the federal government’s demands, calling on Baghdad to send the Region’s financial entitlements. The KRG has repeatedly accused Baghdad of not making regular payments of its share of federal funds.
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