An economist calls for the establishment of a government bank to guarantee depositors’ funds.
An economist calls for the establishment of a government bank to guarantee depositors’ funds.
10-20-2025
Al-Maalouma / Baghdad..
Economic expert Basil Al-Obaidi confirmed on Monday that one of the most prominent reasons for the shortage of cash liquidity in Iraqi banks is the lack of confidence of citizens in the safety of their deposited funds. This has led many to store large sums of money, whether in Iraqi dinars or foreign currencies, at home instead of depositing them in banks.
Al-Obaidi said in a statement to Al-Maalouma Agency, that “citizens’ reluctance to deposit their money in banks has led to a decrease in the amount of liquidity available to the Central Bank and banking institutions, which has negatively affected economic activity and commercial movement in the country.”
He added, “Many citizens fear losing their money or not being able to withdraw it when needed, due to the weak safeguards in some banks, which prompts them to keep it at home, which exposes them to several risks, including emergency accidents or theft.”
Al-Obaidi called on the Central Bank of Iraq to “establish a governmental guarantee bank whose mission would be to provide full insurance coverage for deposits in banks after they are licensed by the Central Bank, with the aim of reassuring depositors and guaranteeing their rights.
He also called for raising the interest rate on fixed and floating deposits, to encourage citizens to deal with the formal banking system instead of keeping their money outside the economic cycle.”
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