United Nations warns of Afghanistan’s banking system collapse

13:18, 22 November 2021
United Nations warns of Afghanistan’s banking system collapse Photo: Danial/ Kabul

The UN has called on nations to take concrete steps in order to save the banking system in Afghanistan from total collapse, according to Reuters

Banks are currently witnessing several problems, among them are the inability of many people to pay their loans as well as lower deposits.

Following the fall of Asharaf Ghani’s government the US froze the assets of the Afghan central bank while the new government installed a limit on withdrawals from banks as people were attempting to get all their life savings out amid the deteriorating situation.

"Afghanistan's financial and bank payment systems are in disarray. The bank-run problem must be resolved quickly to improve Afghanistan's limited production capacity and prevent the banking system from collapsing," the United Nations Development Programme’s report read.

Helping the country, however, might turn out complicated as many nations are currently sanctioning its Taliban* leadership.

"We need to find a way to make sure that if we support the banking sector, we are not supporting the Taliban,” head of UNDP in Afghanistan Abdallah al Dardari said in a statement.

"We are in such a dire situation that we need to think of all possible options and we have to think outside the box," he said. "What used to be three months ago unthinkable has to become thinkable now," he added.

Among the measures viewed by the UNDP to stop the crisis is a deposit insurance scheme as well as credit guarantees and loan repayment delay options.

Earlier, a plane carrying teenage female football players from Afghanistan arrived in the UK from Pakistan ending the rescue story in which many celebrities took part and provided aid. 

*Taliban is a terror organization banned in the US, Russia and many other countries.