ABA collaborates with DAB to address banks constrain
Date: November 07, 2023
Though banking sector is in recovery phase, but still face different challenges in terms of revenue constrains, low confidence, loan recovery and limited correspondent banking relationships. In order to address aforesaid issues ABA organized its member bank CEOs meeting with the Central bank (DAB)under chairmanship of DAB Governor.
At the outset, Mr. Amiri ABA Executive Director expressed his gratitude to DAB on supporting banking sector. He stated that Afghanistan's recent political takeover had led banking sector on the brink of collapse, but effective steps by DAB and Islamic Emirate could manage the crises. Despite positive changes, banks still face numerous obstacles.
During the meeting, ABA requested DAB to support banks in terms of revenue generation through Islamic financial instruments like Alwadya, Sukok as well as other government activities that creates income for banks like collection of taxes, custom duties and other commissions through banks. In addition, DAB was requested to help banks in loan recovery, by putting pressure on Supreme court. Suspension of provisioning, also proposed by ABA as cost relive factor and capital strength of banks. In addition, other banks concern on FX loss/other issues were discussed in details.
In conclusion, DAB appreciated ABA proposal on revenue creation for banks as well as other issues by stating that they will take necessary steps.