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Afghanistan banking sector near collapse, warns country's central bank chief 

Foreign aid payments, which accounted for 40 percent of Afghanistan's gross domestic product, have all but stopped as the West considers how to deal with a group that, until August, led a deadly insurgency against the U.S.-backed government.

September 29, 2021 / 09:58 AM IST
Underlining the economic pressures building on Afghanistan's new government, prices for staples like flour, fuel and rice have risen and long queues are still forming outside banks as they strictly ration withdrawals.

Underlining the economic pressures building on Afghanistan's new government, prices for staples like flour, fuel and rice have risen and long queues are still forming outside banks as they strictly ration withdrawals.

Following the Taliban’s takeover of Afghanistan, the chief of one of the nation's biggest lenders said that country's financial industry is in an “existential crisis” and on the verge of collapse.

"There are huge withdrawals happening at the moment,” Syed Moosa Kaleem Al-Falahi, the Chief Executive of the Islamic Bank of Afghanistan told BBC. Only withdrawals are happening, most of the banks are not functioning, and not providing full services," he added.

Al-Falahi was speaking from Dubai, where he is temporarily based because of the chaos in Kabul, the BBC report stated.

Exacerbated by a drought that threatens to leave millions of people hungry, the economic crisis is among the biggest challenges facing the Taliban 20 years after they were driven from power by a U.S.-led campaign in the wake of the September 11 attacks.

Underlining the economic pressures building on Afghanistan's new government, prices for staples like flour, fuel, and rice have risen and long queues are still forming outside banks as they strictly ration withdrawals.

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Foreign aid payments, which accounted for 40 percent of Afghanistan's gross domestic product, have all but stopped as the West considers how to deal with a group that, until August, led a deadly insurgency against the U.S.-backed government.

According to Al-Falahi, the Taliban is now looking for other sources for financial support. "They are looking forward to China and Russia, and some other countries as well. It seems that sooner or later, they will be successful in dialogue," he told the publication.

China had already announced that it would send $31 million worth of food and health supplies to Afghanistan, among the first foreign aid pledges since the Taliban took power last month.

[Input from agencies]
Moneycontrol News
first published: Sep 28, 2021 11:37 am

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