MILAN, Italy - Iraq’s state-owned Rafidain Bank on Saturday denied the reports that the usage of their electronic payment cards had been suspended, confirming that their services remain fully operational both domestically and internationally.

Reports have circulated in recent weeks that the Central Bank of Iraq (CBI) has directed local banks to suspend the use of electronic payment cards for international transactions starting June 1.

“Rafidain Bank categorically denies reports circulating regarding the suspension of electronic payment cards,” read a statement from the state-owned bank on Saturday, confirming that all MasterCard and Visa cards issued by the bank are “operating fully and normally inside and outside Iraq,” and that “no decision has been issued by MasterCard or any relevant official body regarding their suspension.”

“Rafidain Bank urges citizens not to be swayed by malicious rumors and to rely exclusively on news and updates from the bank's official sources,” the statement added.

The Region Trade Bank (RT Bank), one of Iraq’s first and largest banks, also denied the reports, telling The New Region that they would issue official statements if such developments were to take place and assured that there are no such plans at the moment.

The bank confirmed that their card services remain operational both inside and outside of Iraq “without any issues,” adding that there have been no official decisions or directives from either the CBI or MasterCard affecting these services.

On the other hand, First Iraqi Bank (FIB) on Friday announced that “the current mechanism for settling international card transactions has been suspended, which affects the ability to use your card for international transactions.”

The statement did not specify why the mechanism was being suspended, but confirmed that all of their other services “remain fully operational, including local card usage.”

Since July 2023, the US has escalated pressure on Iraq’s banking sector, targeting institutions suspected of facilitating dollar transfers to Iran. Dozens of Iraqi banks have been barred from opening dollar accounts or conducting international dollar transfers accordingly.

The US move, aimed at curbing currency smuggling to Tehran and limiting financing for Iran-backed proxies, forced the sanctioned banks to operate solely within Iraq. Services like international credit card use were immediately restricted.

Iraq has also banned cash withdrawals and transactions in the US dollar since January 2024, in an effort aimed at controlling the continued decline of the Iraqi dinar’s value against the US dollar.