The Central Bank reveals a decline in deposits in public and private banks.

[RJG]

The Central Bank reveals a decline in deposits in public and private banks.
economy | 04:27 - 08/29/2025


Mawazine News - Baghdad:
In an interesting development, the Central Bank of Iraq revealed on Friday a decline in deposits in government and private banks.
Economic expert Manar Al-Obaidi explained in a post on his Facebook page, followed by Mawazine News, that "the Iraqi government and the Central Bank have adopted a strategy based on enhancing financial inclusion and expanding the use of electronic payments. The main objective of this strategy was to increase the volume of banking transactions, especially those related to deposits."
He added that "despite the significant growth in the volume of electronic transactions during the past period, this increase did not reflect positively on the value of deposits in government and private banks, but rather recorded a decline."
Al-Obaidi pointed out that "data from the Central Bank of Iraq indicate that the volume of deposits in government banks decreased by 11.3% during the first half of 2025 compared to the first half of 2024, while private banks recorded a decrease of 7.18% compared to the second quarter of 2024."
He explained that "current deposits still constitute the largest share of total deposits, reaching 84% in government banks and 76% in private banks, bringing the total banking sector share to 82.23%."
Al-Obaidi emphasized that "government banks continue to dominate the market, accounting for approximately 85% of total deposits, compared to only 15% for all private, commercial, Islamic banks, and foreign branches combined."

https://www.mawazin.net/Details.aspx?jimare=265918

 

 

[RJG]

economy Today, 15:11 | 301

The Central Bank reveals a decline in deposits in public and private banks.

 

 

Baghdad Today - Baghdad
In an interesting development, the Central Bank of Iraq revealed, today, Friday (August 29, 2025), a decline in deposits in government and private banks.

Economic expert Manar Al-Obaidi explained in a post on his Facebook page, followed by Baghdad Today, that "the Iraqi government and the Central Bank have adopted a strategy based on enhancing financial inclusion and expanding the use of electronic payments. The primary goal of this strategy was to increase the volume of banking transactions, particularly those related to deposits."

He added, "Despite the significant growth in the volume of electronic transactions over the past period, this increase has not had a positive impact on the value of deposits in government and private banks, but rather has recorded a decline."

Al-Obaidi pointed out that "Central Bank of Iraq data indicates that the volume of deposits in government banks decreased by 11.3% during the first half of 2025 compared to the first half of 2024, while private banks recorded a 7.18% decrease compared to the second quarter of 2024."

He explained that "current deposits still constitute the largest share of total deposits, reaching 84% in government banks and 76% in private banks, bringing the total banking sector share to 82.23%."

Al-Obaidi stressed that "government banks still dominate the market, accounting for approximately 85% of total deposits, compared to only 15% for all private, commercial, Islamic banks, and foreign branches combined."

Regarding the sectoral distribution of deposits, Al-Obaidi pointed out that "private sector deposits (individuals and companies) accounted for 45% of the total, while the central government's share amounted to approximately 33%, while public institution deposits accounted for 22% of the total."

Al-Abidi said, "This data reflects that electronic payment and financial inclusion policies have not yet achieved their goals. Rather, the results have been the opposite, with a decline in the total volume of deposits."

He pointed out that "another challenge is that government banks, despite their weak services, continue to control the largest share of the market, while the country has more than 70 private banks, including commercial, Islamic, and foreign banks, whose combined share does not exceed 15%." He noted that this reality imposes the need to reconsider strategies for reforming the banking sector, enhancing consumer confidence, and ensuring the availability of accurate and reliable data that can be relied upon to formulate monetary and fiscal policies that are more in line with the requirements of economic growth.

https://baghdadtoday.news/282051-.html

[Laid Back]

A major factor is the widespread public distrust in the Iraqi banking system. Decades of political instability, economic volatility, corruption, and fraud have led many Iraqis to believe that banks are unreliable or risky. Consequently, a large portion of the nation's wealth is held in cash outside of the formal banking system. This hoarding behavior is a direct result of citizens' fear of losing their savings and a lack of confidence that banks can be a safe haven for their money.
 

The CBI has tried many different ways to get the hoarded money in the banks but it looks like that’s not working. My suggestion to the CBI is to go ahead with the delete of 000 project, roll out Lower denominations notes and it will get all the hoarded money stashed at home.

 

Go CBI

Go Delete of 000

Go purchasing power 

[horsesoldier]

From the TOP on down the corruption is still off the charts horrible: which by the way the Iraqi citizens recognize all too well.

They're too savvy to fall for the numerous gimmicky ways being trotted out to gain trust & loyalty. They're not buying what the CBI & others are selling... stalemate.

Still no globally recognized currency and that bodes I'll will.

The criminal element holds back Iraqs bright future; who knows when this will change. The citizens know they're getting shafted all day every day. Why would anyone want to put their money into any financial institution run by the corrupt.

[wciappetta]

It's easy to attribute this to a trust issue with the public, which holds some truth. However, the concept of "current deposits" refers to checking account-type deposits in a transitional economy shifting from state-led provisioning to market-driven income. After prolonged deprivation, there's often a surge in spending on durables, aspirational goods, and services that were previously out of reach. This explains why current deposits (checking) still dominate, as people keep funds liquid for immediate purchases rather than for yield. It aligns with the rise of electronic transactions, where digital rails are used for consumption, not savings. Once basic needs are met, financial planning becomes a priority. The current consumption surge will eventually swing toward long-term deposits. Liquidity is being utilized, not hoarded, with digital rails enabling spending rather than saving. While we understand the issue of hoarded cash in homes, addressing it requires introducing lower denominations. This data shows money is being spent, facilitated by electronic banking. As durable goods saturation stabilizes, savings deposits will begin to grow. Accelerating this shift will be aided by revaluation, drawing in hoarded cash. Both processes are essential. This report confirms an expanding economy, and the dip in deposits is temporary so this data is a good sign for a healthy growing economy.

[RJG]

economy Today, 09:43 | 690

 

 

Economist warns against bank deposits

 

Baghdad Today - Baghdad
- Economic expert, Munar Al-Abidi, warned today, Saturday (August 30, 2025), about the size of deposits in the Iraqi banking system, while stressing that they are dangerous and do not contribute to creating real economic value.

Al-Obaidi said in a post on his Facebook account , followed by Baghdad Today, that “deposits in the Iraqi banking system exceeded 115 trillion dinars in June 2025,” noting that “more than 95 trillion of them are current without interest, while savings and fixed deposits did not exceed 20 trillion only, meaning that nearly 80% of the funds are deposited in short-term accounts that do not contribute to creating real economic value.”

Al-Abidi added, "The most dangerous aspect is that more than 85% of these deposits are held in government banks, which continue to play a traditional role in preserving funds without being able to convert them into productive loans or investment instruments that serve the economy."

He added, "Despite this large volume of liquidity, the total loans granted to the private sector and public institutions did not exceed 46 trillion dinars, or less than 40% of total deposits. This is a very modest percentage compared to Jordan, where it reaches more than 75%, and in Egypt, it is about 85%, while in Turkey it exceeds 100%. What is more dangerous than the size of the loans is their nature, as data indicates that more than 66% of them went to personal consumer loans or loans for construction and real estate purchase, while the rest was distributed among the productive sectors." He indicated that "we note that financing for the industrial sector did not exceed only 4% of the total loans, while financing for the agricultural sector did not exceed the barrier of 3% of the total loans, a number that clearly reveals the absence of a development compass in the work of banks."

Al-Obaidi continued, "This reality places government banks under direct responsibility, as they hold the majority of deposits but have been unable to transform them into a driving force for the economy. They have been content with the role of 'reservoir' rather than being development institutions." He noted that "the persistence of this gap between enormous liquidity and limited funding raises questions about the viability of current banking policies and calls for a radical change in the banking system's operating model."

He said, "For banks to regain their developmental role, there is a package of possible solutions: the first is to redirect the loan structure towards productive sectors such as agriculture, industry and renewable energy instead of being limited to consumer and real estate loans. The second is to develop new financial tools such as financing small and medium-sized enterprises with partial state guarantees. The third is to improve incentives for long-term savings by raising interest rates on savings and fixed deposits to attract additional liquidity to the banking system. The fourth is to expand partnerships with the private sector through joint financing funds that finance infrastructure and industrial projects. The fifth is to enhance transparency and governance within government banks to reduce waste and enhance public confidence."

He concluded, "Iraq is not suffering from a liquidity shortage, but rather from its misuse. Unless the banking system transforms from mere stagnant treasuries into effective institutions that channel funds toward production, the economy will remain captive to a vicious cycle of consumption and sterile financing, and massive deposits will continue to have little impact on growth and job opportunities."

https://baghdadtoday.news/282088-.html

[wciappetta]

People are going to use their cash for purchasing, that's why checking accounts are the main account type in their banks and the draw down is temporary. Electronic banking is on the upswing is what the data shows. It's exactly what we will be doing once we cash out; we will draw down our balances with purchases we previously could not afford. It's a transitional economy from state to private sector. Really is he telling you anything you didn't already know? He seems to be overlooking the critical factor from the citizen's view. JMO

[ScaryMary]

Does this mean that citizens are only using banks to deposit “mattress money” into checking accounts to pay bills or make large purchases? So money in, money out, asap?
And they refuse to carry a large balance in any account because there is no ROI or trust in said banks?

( I’m not so savvy on how this works but @Laid Backand @wciappettaI always appreciate your explanations.)

[horsesoldier]

DANGER WILL ROBINSON, DANGER 

Trying to have some fun here with nincompoops 🤣 💩 

Infuriating mob of jerks recycling everything news year after year making it sound like this a revelation or somehow new or even surprising.

No intentions of moving forward: just "signing" deals to enrich the criminal elites, everyone else be damned.

What an atrocious situation.

[wciappetta]

3 hours ago, ScaryMary said:

Does this mean that citizens are only using banks to deposit “mattress money” into checking accounts to pay bills or make large purchases? So money in, money out, asap?
And they refuse to carry a large balance in any account because there is no ROI or trust in said banks?

( I’m not so savvy on how this works but @Laid Backand @wciappettaI always appreciate your explanations.)

 

It simply indicates they're spending their money. Salaries are electronically deposited directly, and they’re using it. "Mattress money" might be entering the parallel market since it offers the best price if it's in dollars, and some of it may be spent. Also, keep in mind that the CBI is phasing out some physical cash in favor of electronic systems, so it might not appear in deposit data. When we hear reports from various so-called experts, I genuinely believe most people here are better informed than these so-called experts seeking recognition.

[screwball]

On 8/29/2025 at 4:34 PM, Laid Back said:

My suggestion to the CBI is to go ahead with the delete of 000 project, roll out Lower denominations notes and it will get all the hoarded money stashed at home.

 

its the only solution