Iraqi Central Bank warns of "Hoarding"

Books / Dr. Basil Abbas Khudair ...

Archaeologists discovered that the Iraqis were hoarding gold, precious metals, and cash in shelters chosen by the ancient man, in pits and containers, or in graves to protect them from theft and other attacks, and in subsequent decades, when currencies were converted into coins or paper money, the hoarding turned into (the hero) or In other means of concealment, and many believed that the development witnessed by the banking systems in the world would change the habits of keeping money to turn into balances in banks or banks, but this case was not prevalent in all cases because the banking business in [You must be registered and logged in to see this link.]It was and still suffers from deficiencies, shortcomings and poor public confidence, evidenced by the fact that a modest percentage of the total monetary mass in the country is in banks and remains out of circulation because it is saved by methods that are created by citizens, and it is kept in various ways, including converting it to gold, real estate, dollars, cash and asylum. Some convert them to accounts and investments outside the country, and in practice, the citizen is not inclined to keep his money in banks for self-convictions or because of past experiences. When most banks were government, depositors suffered a set of shocks in the years 1991 and 2003 when withdrawals were legalized, and after private banks were added. For the banking business in the country, some have suffered from the attachment of some private banks whose issue has not been resolved until today in terms of liquidating them or taking any action to return people's money. This issue has passed for several years, and banks in general suffer from many problems, starting with their overcrowded buildings and devoid ofThe amenities and the simplest requirements and their problems are constantly growing because many tasks are added to them that are not commensurate with the size of the development, as they pay millions of salaries and they remain unchanged for years, and for example there is no bank that has a garage to park the cars of customers who have to travel certain distances to enter the bank and they are They carry millions or billions of dinars for withdrawal and deposit. As for banking services, they suffer from loss of attraction due to tight spaces, complicated procedures and bureaucracy of dealing, and maintaining paper and manual transactions in most transactions, and the incentives provided for saving (for example) are not encouraging to most savers. Al-Rafidain Bank offers an annual interest of 4 On savings accounts, the Rasheed Bank offers less than that (3.5%), which is not commensurate with the size of the annual inflation that the country is experiencing, while the state borrows from abroad at interest 6,75% annually with the guarantee of the International Monetary Fund and at an interest of 12% or more without the guarantees of the Fund, and there are many reasons and defects that push the citizen to not save his money in government and private banks, the most prominent of which is the lack of confirmed guarantees to return the savers' money at the time chosen by the drawer, which exposes them to many Embarrassment and dangers from the point of many.

What was presented above constitutes one of the difficulties in meeting the Central Bank of Iraq’s call for citizens not to hoard money at home, and to deal with banks and financial intermediation companies during large cash exchanges, as it has warned of the role of securities in the transmission of viruses and bacteria, including Corona, and a statement of the bank said that it Through these directives, it seeks to preserve the cash mass of citizens and avoid cases of theft and fraud and the promotion of counterfeit currencies, and the bank stressed the need to reduce trade exchange in paper currencies, which medical studies have proven to be an active carrier of viruses and bacteria, especially since the country is going through a crisis of the spread of Corona virus, and the bank indicated The Central Bank indicated that it adopts the mechanisms of spreading financial inclusion in [You must be registered and logged in to see this link.]Which promotes the banking culture and the shift to monetary exchange through banking transactions with modern technologies and in all its forms, and some ask whether this call came after the Corona pandemic or for fear of the monetary crises that may occur due to the government's resort to internal and external borrowing and some of it from the assets of banks after the approval of the House of Representatives on The borrowing law aimed at covering the pure deficit known to all? Iraq is going through a financial crisis, some specialists say that one of the ways to remedy it is to encourage citizens to put their money in banks in order to be pumped into the markets in the form of investments instead of saving them in homes. One of its benefits is to reduce risk when there is a high demand for depositor withdrawals. These calls do not bring any positive results unless they are coupled with a set of effective measures that reassure the public, facilitate the saving process and give the incentives to make this choice, most notably:

. Addressing the bureaucracy of the savings and withdrawal procedures

Governmental banks, as they suffer from a major defect, because they are considered weak links, whether with the procedures they contain or the ability of some employees to practice this activity, and the treatment of the defect must be substantial and real and not through wrapping the facades, painting the walls and replacing the lighting, so it is imperative to access the latest prevailing modern technologies. In international banks to bridge the technical gap that is expanding day by day due to our big banking backwardness.

. Requiring banks to complete the process of electronic linking of accounts between branches, in Rafidain and Rasheed (for example) banks may not withdraw or deposit except through the branch in which the account was opened and not through any branch in a way that shortens the distance and time, and any withdrawal process requires the submission of the supporting documents. The original and photocopies of it, although the savings book contains full information and a picture of the account holder, and the bank documents all the documents when opening the account.

. Granting incentive benefits to savings accounts in a way that corresponds to the levels of lending interest prevailing in the market for the purpose of motivating citizens to deposit their money in banks with the lowest degree of risk, and diversifying savings to be with periods of time less than one year, such as for a period of 3 to 9 months to promote the culture of savings, and the beneficiaries can bear from Saving policies are part of the costs or losses that banks are exposed to from the policy of stimulating savings, in a way that does not burden the policies and costs of lending to others.

. Expediting the issuance and enforcement of legislation related to the protection of depositors' funds in a manner that does not expose them to the risk of losing their deposited money in whole or in part, bearing in mind that the funds allocated for this purpose are sufficient to meet the full possibilities and not to burden the depositors with any financial burdens from this procedure.

. The need for the central bank to quickly resolve matters of the lagging private banks and banks that have not fulfilled their obligations and promises towards depositors for years to restore confidence in private banks to provide additional channels to absorb the savings of individuals and organizations and notify depositors that the central bank stands by them and is not a protector of the lagging bank, and if this requires amending the banking law Which currently includes complex procedures in liquidation and bankruptcy.

. Work on making structural changes in banks in terms of departments, buildings, spaces, customer services and human resources in terms of selection, training and qualification, updating the methods of advertising, advertising and marketing, and not considering the issue of attracting savings as a collection because attracting it requires following the appropriate modern methods of promotion and advertising.

We note in this regard that some Iraqis have inherited concerns about putting their money in banks after the collapse of the currency's value in the 1990s, and breaching some private banks accused of money laundering, currency smuggling and seizing the savings of large numbers of Iraqis before they close their doors, and the public is not far from the experiences of some countries such as Syria and Lebanon, in which there have been collapses in exchange rates and problems in dealing with banks, and the public is not isolated from the calls to change the exchange rates as one of the solutions in addressing the budget deficit due to low oil prices and the lack of exports within the huge agreements that do not match their revenues in covering the growing obligations For the government to spend on salaries and other expenses.