The crisis in private banks is worsening… Al-Jawahiri warns of the risk of declining deposits
The crisis in private banks is worsening… Al-Jawahiri warns of the risk of declining deposits
9-7-2026
Information/Baghdad…
Economic expert Amer al-Jawahiri confirmed on Monday that the current crisis plaguing the Iraqi banking sector stems from deep-rooted structural problems and accumulated errors. He explained that the recent oversight decisions and popular protests were an inevitable consequence of the majority of private banks relying on speculation and the currency auction window instead of providing genuine banking and development services.
Al-Jawahiri told Al-Maalouma, “The fundamental problem lies in the establishment of most private banks as fronts for achieving quick and easy profits through the Central Bank’s dollar auction window.” He added, “This approach has led to financial fragility and a severe liquidity crisis due to their lack of actual banking activity, such as loans and productive investments.”
He further stated that “many of these banks continued to disregard sound operating principles, in addition to poor organization and the appointment of unprofessional and incompetent management.” He pointed out that “this mismanagement has made them vulnerable to local punitive measures, such as the imposition of oversight by the Central Bank.”
Al-Jawahiri explained that “the lack of coordination and understanding between the Central Bank, as a regulatory body that tries to apply international standards to protect the economy, and the Association of Private Banks, has exacerbated the repercussions of the crisis,” stressing that “the first victim of this clash and mismanagement is the ordinary citizen and the depositor who has become unable to recover his money and savings, which necessitates accelerating the development of comprehensive reform plans that restructure the banking sector and ensure the protection of depositors’ funds.”
It is worth noting that the liquidity shortage and declining public confidence in private banks have led to a continued decrease in deposits, reaching 104.87 trillion dinars by the end of June 2026, a drop of 5.6% or 6.19 trillion dinars compared to 111.06 trillion dinars at the end of 2025.
Deposits have also continued their downward trend compared to previous years, having reached 133.49 trillion dinars at the end of 2023 and 123.32 trillion dinars at the end of 2024. By mid-2026, deposits were distributed as follows: 49.96 trillion dinars in the private sector, 31.42 trillion dinars in the central government, and 23.48 trillion dinars in public institutions.
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