ABA Working Group Meetings on Loan Recovery/ Creation of Special Court
date: During July
As the Loan Recovery Working Group was formed in Finance Law workshop held in Dubai on May 2016 and it was advised that the WG will have regular meetings in Afghanistan in order to accelerate loan recovery and lobby for creation of especial Court if needed. Finance Law Working Group has been recommended by the U.S. Department of Commerce Commercial Law Development Program (CLDP) with coordination of ABA.
In this regard, Afghanistan Banks Association (ABA) arranged four Loan Recovery Working Group Meetings during July 2016 in ABA Office.
The working group is comprised of representatives from Administrative Office of the President (AOP), the Ministry of Justice, Da Afghanistan Bank (DAB), Afghanistan Financial Dispute Resolution Commission (FDRC), Supreme Court, Ministry of Finance, Afghanistan Banks Association (ABA), CEO, and Bank-e- Mellie Afghan.
The purpose of the working group is to address certain reforms to take place in Afghanistan’s secured lending industry, recovery of loan, standardization of loan documents, formation of special court or a separate judicial branch.
During these meetings participants discussed in details problems of banking sector on recovery of loans in terms of implementation of court verdict, Huquq and creation of special court and reached to the following conclusion.
1. Dedicated trainings to the court judges, and the Ministry of Justice responsible authorities are highly required. In this regard, MOJ concerned officials should be contacted.
2. It is obligation of the banks not to accept the property as guarantee which belongs to personal residential of the borrower or it is hereditary or joint. (The borrower should have more than his personal house for guarantee).
3. It is obligation of the banks to extend loans against percentage of collateral stated in the banking law and relevant regulations.
4. In relation to the execution of decision of the court, Ministry of Justice may act as soon as possible.
5. Currently there are 2 Commercial Courts (A and B) are available in Kabul.Bank cases are more tentatively proposed to be addressed by the Commercial Court B, and in the future, of the two courts, taking in to consideration budget and other issues, court B can be allocated to banking/financial sector special court in order to respond quickly to cases of banking /financial sector.
Achievements of the Working Groups Meetings:
1. In order to fulfill the tasks set forth in resolution two plans considered:
a. Short-term: special banking training should be provided to Judges and Prosecutors(Huqoq)
b. Long-term: Creation of Special Court for banking sector was considered long-term plan will be discussed with Supreme Court in particular.
2. Some changes were made in the resolution.
3. As per WG advice, ABA collected unresolved loan cases from its member banks to be observed where there is need for creation of special court?
4. CLDP with coordinating of ABA facilitated special banking training for 12 Judges/ Prosecutors that will be conducted in Dubai in November 2016. ABA coordinated with the Ministry of Justice and Supreme Court and list of Nominees (Judges/Prosecutors) has been shared with CLDP.