Al-Taif Islamic Bank to resume partial withdrawals next week

Summary

• Al-Taif depositors can withdraw part of their balances from next week under percentage-based caps.
• Iraq's central bank placed the bank under 18-month guardianship on September 2 over violations.
• Partial payouts test the central bank's pledge that depositors' money is protected, not lost.

The latest

Depositors at Al-Taif Islamic Bank will regain partial access to their money starting next week, with payouts capped at fixed percentages of each account balance, the bank said Thursday. The reopening comes nearly a month after the Central Bank of Iraq seized control of the lender and froze all withdrawals and deposits. Branches nationwide have already received cash.

Details

• The mechanism: Withdrawals will be limited to fixed percentages calculated from the balance available in each account, a formula the committee now running the bank announced on September 19 to ensure what it described as fair distribution among depositors. The bank said further steps are under way to ease access, without detailing them.
• The guardianship: The Central Bank of Iraq placed Al-Taif Islamic Bank for Investment and Finance under guardianship for 18 months on September 2, citing violations that it said had damaged the lender's financial position and depositors' funds. The specific violations were not itemized publicly.
• Who runs it: Acting CBI Governor Nizar Nasser Hussein appointed Imad Mohammed Hamad to manage the bank under the guardianship order. The committee Hamad oversees has become the channel for payout decisions, including the percentage formula set out in September.
• The freeze: The takeover suspended the bank's banking services outright, halting both withdrawals and deposits. That left account holders without access to their funds for roughly four weeks before the partial reopening announced Thursday.
• Depositor protest: On September 6, four days after the guardianship order, depositors demonstrated outside the bank's branch in Baghdad's Karrada district, demanding access to their money. It was the most visible public pressure on the central bank during the freeze.
• Not bankruptcy: The CBI has repeatedly rejected the idea that the lender is insolvent, describing the guardianship as a precautionary measure to protect depositors. Hussein said most deposits at Al-Taif are guaranteed and that the central bank would step in to cover any shortfall.
• The phased plan: Under a schedule the CBI announced on September 8, withdrawals and the bank's other obligations are being settled gradually rather than all at once, with salary payments given priority over other claims. The central bank did not publish a completion date for the phases.
• Cash in branches: The bank said branches across the country have already been supplied with cash ahead of next week's reopening, a logistical step intended to keep payouts orderly once counters open. Neither the amount distributed nor the percentage ceilings were disclosed.

Background

Guardianship is a supervisory tool that lets the central bank take over a lender's management without declaring it bankrupt, replacing executives with an appointed administrator for a fixed term while obligations are restructured. Al-Taif's term runs 18 months from September 2.

Between the lines

The sequencing matters: the freeze, the Karrada protest, then a payout formula announced on September 19 and cash moved to branches before reopening. Prioritizing salaries and capping withdrawals by percentage both point to managing limited liquidity in stages rather than meeting full demand at once — consistent with the central bank's insistence that the problem is control, not solvency.

What's next

Watch next week's reopening for the actual percentage ceilings applied at the counter, whether branches stay supplied through the first days of payouts, and any CBI update on the phased settlement timetable within the 18-month term.

Source: Shafaq News