Commercial Banks Consultative Groups (CBCG) Meeting Was Held in DAB
Date: September 24, 2020
To address member banks problems on credit, operation, investment correspondent banking relationship and other regulatory area, to induce lending, investment, access to finance as well as profitability of the banks, ABA and Da Afghanistan Bank (Central Bank of Afghanistan -DAB) conducted Commercial Banks Consultative Group (CBCG) Meeting on September 24, 2020.
The agenda of the meeting focused on below points:
01 Update from ABA on meeting with Afghan post and member banks on branchless banking
02 Relaxation of Funded Portfolio:
• Removal of MCU (Mandatory Clean Up on OD);
• Relaxation of collateral requirements of 120% for credit facility to the vulnerable sectors;
• Relaxation of restructuring norms for loans under “Doubtful” category.
03 Relaxation of Non-Funded Portfolio of banks:
• Relaxation of single party exposure limits for non-funded exposures- to be allowed on guarantees issued based on C/G.
• Credit Conversion factor for B/G’s at least to 50% on the open position of B/G’s issued and lesser
percentages for guarantees issued based on CG’s;
04 Extension of relaxation of covid 19 until March 2021.
05 Addressing challenges on Fund transfer to provincial branches
06 Investment opportunity for the banks (conventional as well as Islamic)
• Increase in the interest rate on CN’s to improve the profit position of the Banks;
• Reduction of capital requirement to 0% on investment grade instruments (Bonds- sovereign and
Quasi government) and 20% for other graded instruments;
• Sukuk for Islamic banking;
• Introduction of Islamic paper or Sukuk to manage Islamic liquidity;
• Provide interest to the banks on the required reserves as was in the previous cases;
07 Correspondent banking relationship in USD
09 Specific regulations on internet/online banking
10 PEP customers
11 Sale of collateral property in bank’s custody
12 Settlement between banks
14 Charging of MMO (mobile money operations) for transactions