Payment Systems

The payment network consists of the following systems:

• RTGS: Real Time Gross Settlement System
• C-ACH: Cheque - Automated Clearing House
• GSRS: Government Securities Registration System

The CBI aims to reduce the use of cash in the country despite the challenges of geography and the remaining security issues which make the transfer of money across the country difficult and risky. Hence the objective is to automate the settlement of checks, salaries and the activation of automation systems for electronic cards, in order to keep more liquidity in bank accounts.

The other achievement is the automation of the primary market for the government securities system which the CBI began to work on with the consultation with the Ministry of Finance (MOF) in 2008. There are also a plans to automate the activities of the secondary market.

The legal framework of payment and settlement systems

The overall aim of the CBI with the support of its laws is to maintain domestic price stability and promote a competitive & stable financial system. The legal framework for the banks and the CBI is stated in the Banking Law and the Central Bank of Iraq Law which were issued on September 19th, 2003 and March 6th, 2004 respectively. The objective of the CBI in issuing these laws was to set up an Iraqi legal framework for banking in line with international banking standards, promote confidence in the economy by establishing a safe financial environment, and provide a competitive and accessible banking system. 

It should be noted that the laws of payment systems are currently under study by the CBI in order to assess the experiences of other countries and its applications in the working environment for a country like Iraq. Based on the 2004 CBI law, these electonic activities have been agreed between participants and the CBI through contracts which include guarantees, legal rights, and protections for all parties.

The CBI is also working with local and foreign entities to issue special laws for all electronic payments so that these actitivies operate under a proper legal environment.

The Securities Law was legislated and published in April 2004. It highlights the need to legislate more developed laws to cover the activities of the private sector in the securities market as well as on the organization of primary and secondary markets for government securities.