KABUL, 8 October 2003 — National Bank of Pakistan yesterday became the first foreign bank to open a branch in Afghanistan, marking the start of the country’s new private commercial banking system, officials said.

“This is the first foreign bank to open its office in Afghanistan,” Afghan Central Bank Governor Anwar Ul-Haq Ahady told reporters at the opening of the branch in the upmarket Wazir Akbar Khan district of central Kabul.

“Theoretically our new banking system started about a month ago or so but practically this is the first step; today is the first day of our new banking system,” Ahady said.

Afghanistan three weeks ago issued new laws governing the central bank and to establish a commercial banking system. It also issued licenses to British-based Standard Chartered Bank and First Micro Finance Bank, majority-owned by the Agha Khan Fund for Economic Development.

National Bank of Pakistan only received its license last week but has become the first foreign bank to open for business in Afghanistan. “I’m pleasantly surprised. It’s been less than a week since we gave them a license and they have been able to complete the process,” Ahady said.

Finance Minister Ashraf Ghani was guest of honor at the opening in front of around 80 Pakistani and Afghan dignitaries and businesspeople.

National Bank of Pakistan Kabul branch General Manager Syed Mehmood Ul-Hassan said the bank hoped to start carrying out international money transfers within five days once its digital telephone lines are installed. “We are opening for business today but it is a gradual start,” he said, adding the bank would be just accepting deposits until the phone system began working. The bank would cater for aid agencies, embassies and businesses.

Depending on the initial response, he said the bank planned to open other branches in the main cities within a year. “We would like to have a branch in Mazar-i-Sharif, in Herat, in Kandahar, in Jalalabad; initially these four branches,” he said.

The bank however was not expecting an easy ride in Afghanistan. “We may definitely face a lot of problems, to begin with the security concerns. Although security is not bad in Kabul, it’s not ideal.”