The Central Bank reveals the amount of money in circulation: 80% of it is hoarded in homes for one reason
Baghdad – The Central Bank of Iraq revealed, on Wednesday, the volume of circulating funds, while indicating that 80% are stocked in homes due to the lack of high confidence in the citizen towards banks.
Ihsan Al-Yasiri, Deputy Governor of the Central Bank, said in an interview with our colleague Karim Hammadi, followed by “Nass” (April 20, 2022): “We have 76 trillion dinars as a source of circulation, 20% of which are deposited in banks, and 80% of them are hoarded homes, and this is a deprivation for society.”
He added, “Hoarding money in homes, which is behind the mistrust of some citizens in banks, regardless of whether they are private or governmental, is a high risk, as these funds may be exposed to damage, burning or theft.”
And he stated, “The Central Bank has set strict standards to control the behavior of banks and we are witnessing a development in performance, knowing that the banks’ control has 3 tracks, the first is improving performance, merging the bank, or withdrawing the bank’s license if the reluctance continues.”
He said, “The government system acquires 85 deposits and the public,” noting that “after 2003, we have a large number of banks, some of which are private, which are excellent and have reached stages in digitization and the digital economy.”
He added, “We have supervision and an attempt to push some banks to be good and rise to the required level, as we focused on controlling the banks’ behavior.”
He continued, “We have 70 private banks, more than half of the number are excellent, while the government has seven banks, namely: Al-Rasheed, Al-Iraqi Trade, Al-Rafidain, Al-Nahrain Bank, which is a model for Islamic banking, and the Housing Fund, while the Industrial Bank is doing well.”
Al-Yasiri stressed that “the enforcement of the law for loans confirms the existence of a guarantee for any dinar that is loaned, and the one who does not have an income from a fixed source must provide a guarantor – the cost of lending is very high, and when there is an interest of 8% on the loan, it is considered very expensive, but if the limits of risks are increased, the risks may be increased.” interest rate increases.
He pointed out that “the Rafidain Bank granted loans to large institutions, and there is a loss of up to 6 trillion dinars in these loans due to the pressures of increasing the interest rate, but part of the risks of non-payment are avoided through them.”