Date: August 17, 2022
To strengthen Afghanistan banking sector, the Economic Commission session was held on 17 August 2022 under the leadership of Honorable Alhaji Mullah Abdul Ghani Baradar, Vice Prime Minister Economy and Chairman of the Economic Commission. In this meeting, Honorable Mullah Abdul Salam Hanafi, Vice Prime Minister Administration and Chairman of the Administrative Commission, Mr. Hedayatullah Badri, Acting Minister of Finance and other government authorities attended. On behalf of the country's banking sector, Mr. Najibullah Amiri ABA Executive Director shared banks views with Economic Commission for the empowerment of the sector. As a result, the following valuable decisions were taken by the commission. While appreciating the actions of the honorable commission, Afghanistan Banks Association(ABA) hopes that taken decisions will support banking industry and overcome challenges.
1. The Supreme Court should establish a special court in order to quickly deal with defaulted loans cases of public and private banks.
2. The Ministry of Finance should reactivate previous Bad Debt Recovery Commission. The said commission should take the necessary measures to acquire defaulted loans from public and private banks.
3. The Ministry of Foreign Affairs should try to support banks in formation of correspondent banking relationship with foreign banks.
4. Da Afghanistan Bank(DAB), in cooperation with the Ministry of Finance, should launch Islamic banking financial instrument like (Al-Wadiyah) for banks.
5. Da Afghan Bank should present the mechanism prepared for the implementation of Islamic finance to the Economic Commission.
6. Until the completion of all the documents related to Islamic banking under the supervision of the Academy of Sciences, all public and private banks of Afghanistan should start issuing Islamic loans (Mudaraba, Murabaha, Salm, etc.) after obtaining permission from Academy of Sciences. Of course, the process should be commenced after approval of Shariah Board of Da Afghanistan Bank in the light of Shariah.
7. The Ministry of Foreign Affairs should reach to an understanding with donor countries and institutions that aids should not be given to a specific bank rather should also be given to other private banks in Afghanistan in the light of a systematic mechanism, so that there is justice in dealing with the banks.
8. Increase share of private banks in government banking transactions i.e. guarantees, tariffs and salaries of government employees. The Ministry of Finance and Da Afghanistan Bank should take necessary measures to divide salary accounts of government employees between private banks and gradually make entire monetary payments through banks. In this context, all civil and military departments should cooperate with the Ministry of Finance and DAB.
9. Public and private banks of Afghanistan and other relevant institutions should gain experience of Islamic countries to promote Islamic banking in the country.