95 trillion dinars kept outside the banking system. What is its impact on the economy?, 5 APRIL

 95 trillion dinars kept outside the banking system. What is its impact on the economy?

Economy News – Baghdad

The adviser to Prime Minister Mazhar Mohamed Saleh confirmed on Saturday that the frequent use of digital payment systems grants lending to citizens at a lower cost, including that 95 out of 109 trillion dinars kept outside the banking system.

“The positive steps in activating e-commerce come in one of its goals in line with the government and the Central Bank’s quest to integrate home-bunded funds (cash leaks) into the banking system, which contributes to strengthening the strength of the national economy and achieving financial stability,” said Mazhar Mohammed Saleh, the adviser to the Prime Minister.

He pointed out that “the Monetary Authority has already prepared registration controls and procedures to obtain a license to practice this trade, and in a coordinated manner that contributes to regulating the market and enhancing consumer confidence.”

He added that “the steps of the government and the central bank to enhance confidence and activate e-commerce were consistent and the launch of digital transformation projects, since the Central Bank announced the launch of strategic projects to support digital transformation, including the instant payments project, local cards and unified payment gateways, all of which aim to promote financial inclusion and facilitate digital banking operations.”

He pointed out that “all procedures for dealing with information technology and integrating it into digital payment systems are consistent with the development of the country’s digital renaissance, the financial culture of society, and the development of the behavior of the monetary society towards inherited customs, traditions and cultures, where the issue of hoarding money in homes instead of depositing it in banks remains a prominent economic challenge in Iraq.”

He explained: “Estimates indicate that about 87% of the monetary mass, or about 95 trillion dinars out of 109 trillion dinars, are kept outside the banking system, which disrupts a large part of the national wealth from effective participation in the economy.”

He pointed out that “the more uses digital payment systems, including e-commerce, the more effective the banking activity and the less leaks outside banks, which gives official and authorized banking units the greater opportunity to grant more credit or lending to citizens at a lower cost and higher efficiency through the component of the mostly low interest.”

He pointed out that “the parallel market for marrows that deal with money traded or load outside the banking system is a very dangerous, illegal and costly market for the citizen and the national economy in the use of credit operations or lending with a very high usury interest or what is called the marab market, due to the ambiguity of its operations, as well as that some of its activities conflict with the anti-money laundering law due to lack of transparency in financing and loss of governance elements in it and accompanied by the risks of trading and recovery.”

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