Trade Bank of Iraq signs Kurdistan salary localisation agreement

By bne IntelliNews November 4, 2024

The Trade Bank of Iraq (TBI) has signed an agreement with the Kurdistan Regional Government (KRG) to localise salary payments for Kurdish region employees, the bank announced on November 3.

The agreement implements a Federal Supreme Court ruling from February 2024 requiring all KRG employee salaries to be processed through federal banks, following directives from Prime Minister Mohammed Shia al-Sudani.

"This contract enables TBI to participate in the salary localisation process for our citizens employed in the Kurdistan Region of Iraq," the bank said in a statement.

The February court decision (Case 224/269/Federal/2023) mandates that salaries for all regional ministry employees, retirees and social welfare recipients must be paid through federal government banks operating outside the region, with amounts deducted from Kurdistan's annual budget allocation.

The ruling requires government banks to "facilitate the localisation process and implement all necessary measures to enable beneficiaries to receive their salaries at their place of residence through outlets across the region or banks licensed by the Central Bank of Iraq."

The move represents a significant step in centralising Kurdish region financial operations under federal oversight, following years of separate salary payment systems.

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