KABUL, 19 September 2003 — Afghanistan presented licenses to two foreign banks including British-based Standard Chartered yesterday in front of visiting US Treasury Secretary John Snow, marking the opening of the war-ravaged country’s first private commercial banking system.
Snow, on a half-day visit to Kabul, attended a ceremony at which central bank Governor Anwar Ul-haq Ahady formally handed over the two licenses to Standard Chartered Bank and First Micro Finance Bank, majority-owned by the Agha Khan Fund for Economic Development. Representatives from the third successful applicant, state-owned National Bank of Pakistan, were not present to receive their license.
“This is a really historic day for Afghanistan, for the central bank, for basic institutions and for the country as a whole,” Snow said.
Snow later held meetings with Finance Minister Ashraf Ghani and President Hamid Karzai. Afghanistan Tuesday issued new laws governing the central bank and to establish a commercial banking system.
“Now, with these new laws, Afghanistan is moving toward a banking system whereby the central bank is responsible for monetary policy, price stability, and supervision of commercial markets,” said Ahady.
The establishment of private commercial banking allows the central bank to focus on monetary policy and supervision rather than commercial activities. Ahady on Tuesday said the central bank hoped to disengage from commercial activities and start working on proposals to deal with the six existing state-owned commercial banks.
Standard Chartered local project director John Janes said the bank would open its Kabul branch “as soon as possible,” marking the bank’s first Afghan venture in its 150-year history.
The leading emerging-markets bank will initially offer US dollar and afghani deposit services, as well as international transfers in most major currencies. First Micro Finance Bank plans to start operations at the start of next year, bank head Olivier Massart said.
Currently businessmen have to either carry bags full of cash or use the traditional ‘hawala’ money transfer system.
Afghanistan’s banking system is currently being rebuilt from the ground up following 23 years of war. Most people do not have bank accounts and stash their money at home.
