Despite Iraq’s banking sector holding a combined capital exceeding 100 trillion dinars, public distrust in financial institutions has left about 80 percent of the country’s cash circulating outside the banking system and stored inside homes, according to Iraqi officials.

Widespread Lack of Confidence

Central Bank of Iraq Governor Ali Alaq said that the reluctance of Iraqis to deposit their savings in banks — including both state-owned and private banks — has become a serious threat to the economy.

About 80 percent of cash is kept outside banks and inside homes

Alaq stated, describing it as a result of weak public confidence in banking services.

This practice has led millions of citizens, especially salaried employees, to hoard their earnings in Iraqi dinars at home instead of depositing them in banks, leaving banks with less liquidity for lending and investment.

Over 25 Trillion Dinars Kept in Homes

According to data reviewed by Channel8, more than 25 trillion dinars are currently held in cash by citizens rather than stored in banks.

Mustafa Garawi, a member of the Iraqi Parliament’s Finance Committee, warned that this poses a serious risk to economic stability.

There is a risk of collapse in the Iraqi economy because citizens are keeping their money at home due to lack of confidence in state-owned banks and banking services

Garawi said.

He urged the government and the central bank to implement reforms to rebuild public trust, expand digital banking, and fight corruption and mismanagement in the sector.

Top 10 Iraqi Banks by Capital (2024)

Rank	Bank	Capital (Trillion IQD)
1	Rafidain Bank	58.2
2	Rasheed Bank	24.1
3	Real Estate Bank of Iraq	7.4
4	National Bank of Iraq	5.2
5	Agricultural Cooperative Bank of Iraq	3.9
6	Bank of Baghdad	3.7
7	Industrial Bank of Iraq	3.2
8	International Development Bank	2.8
9	Iraqi Islamic Bank	2.7
10	Al-Mansour Bank	2.1

Despite these figures, analysts note that Iraq’s banking sector remains underdeveloped, with low public participation, minimal private-sector lending, and outdated financial infrastructure.