Government Advisor: 95 Trillion Dinars Stored Outside the Banking System
Economy 04-05-2025, 1:44 PM Baghdad – INA – Amna Al-Salami Adviser to the Prime Minister, Mazhar Mohammed Salih, confirmed today, Saturday, that the widespread use of digital payment systems provides loans to citizens at lower costs.
He explained that 95 of the 109 trillion dinars are stored outside the banking system.
Adviser to the Prime Minister, Mazhar Mohammed Salih, told the Iraqi News Agency (INA):
"The positive steps in activating e-commerce are consistent with one of its objectives, as
the government and the Central Bank seek to integrate hoarded funds in households (cash leakage, as it is known) into the banking system, which contributes to strengthening the national economy and
achieving financial stability." He pointed out that "the Monetary Authority has previously prepared controls and registration procedures to obtain a license to practice this trade, in a coordinated manner that contributes to regulating the market and enhancing consumer confidence."
He added, "The steps taken by the government and the Central Bank to enhance confidence and and activate e-commerce are consistent with the launch of digital transformation projects.
This has been the case 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
enhance financial inclusion and
facilitate digital banking operations."
He pointed out that "all measures to address information technology and integrate 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 monetary behavior in relation to inherited customs, traditions, and cultures.
Hoarding money at home instead of depositing it in banks remains a prominent economic challenge in Iraq." He explained, "Estimates indicate that approximately 87% of the money supply, or
approximately 95 trillion dinars out of a total of 109 trillion dinars, is held outside the banking system,
preventing a large portion of the national wealth from effectively participating in the economy."
He explained that "the more digital payment systems are used, including e-commerce, the
more efficient banking activity becomes and the fewer leakages outside of banks.
This gives official and licensed banking units the greatest opportunity to grant more credit or
lend to citizens at a lower cost and with greater efficiency, thanks to the often low interest rate." He noted that "the parallel market for usurers, which
deals with funds in circulation or hoarded outside the banking system, is a very dangerous, illegal, and costly market for citizens and the national economy when it comes to credit transactions or lending at very high usurious interest rates, or what is known as the usurers' market.
This is due to the opaque nature of its operations, in addition to the fact that some of its activities conflict with the Anti-Money Laundering Law due to the lack of transparency in financing, the absence of governance elements, and the accompanying risks of trading and recovery." https://www.ina.iq/231404--95-.html