Iraq to grant digital banking licenses in early 2028

The Central Bank of Iraq (CBI) said on Wednesday that final permission for digital banks will be granted in early 2028, following the completion of a banking reform phase. The announcement, made through a spokesperson, signals a structured timeline for the introduction of digital banking services in the country.

Timeline linked to reform completion

Mahmoud Dagher, the CBI spokesman, told the state-run Iraqi News Agency (INA) that final approvals for digital banking licenses will be issued after the reform process wraps up, by the end of 2027 or the start of 2028. Dagher added that the consulting firm Oliver Wyman is currently leading the reform programme. Organisations that have already obtained preliminary authorisations are fully aware of the schedule for receiving final clearance.

Application surge and selection criteria

In October 2025, the CBI received roughly 80 applications to establish digital banks. Dagher noted that licences will only be awarded based on a set of criteria derived from market research, the nature of the proposed business, and experiences in other countries, where the number of digital banks is often limited to three or four.

Broader reform strategy

Earlier in 2025, CBI officials and Oliver Wyman representatives discussed a banking reform proposal put forward by the Iraqi Private Banks League (IPBL) aimed at modernising Iraq’s banking sector and aligning its operations with international practices. The strategy is designed to make the banking sector operate more securely and effectively, while also strengthening local legislation, governance, compliance, and risk management. According to the CBI, adopting this approach will boost both local and international confidence in Iraq’s banking industry.

Separately, the CBI earlier reached an agreement with Oliver Wyman to conduct a thorough analysis of the conditions under which Iraqi banks are prohibited from conducting transactions in US dollars. Oliver Wyman’s work focuses on improving bank procedures to meet international standards, and on creating effective strategies to reintegrate Iraqi banks that have been barred from US dollar transactions into the banking system, both domestically and internationally.