UNDP Workshop on Afghanistan Banking and Financial System
Date: December 8, 2021
UNDP Workshop on Afghanistan Banking and Financial System: Current Status and Options in the Context of a Development Emergency and Sanctions”
In order to meet banking sector challenges, Afghanistan Banks Associations (ABA) attended a workshop in Istanbul Turkey on Dec 8, 2021 which was organized by United Nation Development Fund (UNDP). This workshop was also attended by different other stakeholders, including the World Bank Group and Afghan Credit Guarantee Foundation (ACGF).
Afghanistan Banks Associations presented the overall situation of the banking sector and suggested measures to overcome the present challenges. Such suggestions were welcomed by UNDP and assured that working closely with the banking sector, UNDP will support the banking and financial sector of the economy.
ABA presented the following suggestions.
1. Creation of a partial deposit insurance mechanism for deposits.
2. Immediately Un-Freeze the funds in Afghan private citizens and private sector assets and return the funds to the Afghan commercial banks for distribution to their beneficiary account holders
3. Routing of Humanitarian Aid through banking channel via Injection of Physical Cash
4. Structuring a credit guarantee scheme for new and existing loans to MSMEs.
5. Activation of an interoperable mobile payment mechanism to support the operations and activities of humanitarian and development partners in Afghanistan
ABA hopes that with the implementation of these initiatives, banking sector activities will boost up and the individuals and business segments of the banking sector will operate normally once again. The individual depositors will have more confidence in the banks after having their deposits insured by UNDP/Third party along with the present insurance coverage given by the central bank. The business community would be able to engage in international trade (import / export) and have access to bank loans after the credit guarantee arrangement is reached.
ABA is always striving its best for the development of the banking sectors and considering the present scenario, will exercise all the available options to safeguard the interest of the banking sector.