UNDP warns Afghanistan banking system on brink of collapse

ANI
23 Nov 2021, 04:33 GMT+10

New York [US], November 23 (ANI): A new UN report on Monday said Afghanistan's banking and financial systems are on the verge of collapse following the country's takeover by the Taliban.

"Afghanistan's financial and bank payment systems are in disarray," the report by UN Development Program (UNDP) said. "The bank-run problem must be resolved quickly to improve Afghanistan's limited production capacity and prevent the banking system from collapsing."Soon after the Taliban assumed power in Kabul, the United States froze Afghanistan's international reserves. This has led to a dramatic shock in the country's financial and payment systems.

Currently, the country's central bank could not meet deposit demands, prompting the Taliban to impose withdrawal caps of a maximum of USD 200 per week. The amount was recently increased to USD 400, Sputnik reported.

The report said that Afghanistan's total banking system deposits fell to USD 2 billion in September from USD 2.8 billion at the end of 2020.

With the current pace and withdrawal restrictions, deposits are projected to fall to USD 1.7 billion by the end of 2021, likely leading to the collapse of Afghanistan's banking sector, the report said.

"Without the banking sector, there's no humanitarian solution for Afghanistan," UNDP Resident Representative Abdallah Al Dardari said. "Do we really want to see Afghans completely isolated?"In addition, the country's credit market is also in decline. Total credits fell to USD 307 million in September from USD 33 billion at the end of last year.

To prevent the collapse of the country's banking system, UNDP urged for prompt and decisive action, which includes deposit insurance for depositors, adequate liquidity for the banking system and credit guarantees and loan repayment delay options. (ANI)

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Greek Herald.

More Information

null in null

International Business

Section

PwC: Copper shortages may disrupt 32 percent of chip output by 2035

AMSTERDAM, Netherlands: Some 32 percent of global semiconductor production could face climate change-related copper supply disruptions...

Ireland’s PM ‘hopeful’ of EU-US tariff deal before July 9 deadline

DUBLIN, Ireland: Taoiseach Micheál Martin has expressed cautious optimism that the European Union and the United States can strike...

FedEx, UPS step up as Canada Post loses market share in strikes

OTTAWA, Canada: With Canada Post struggling to maintain operations amid labour unrest, rivals like FedEx and UPS are stepping in to...

Beijing blamed for covert disinformation on French fighter jet Rafale

PARIS, France: French military and intelligence officials have accused China of orchestrating a covert campaign to damage the reputation...

Beijing hits back at EU with medical device import curbs

HONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device...

Summer travel in chaos as French air traffic controllers walk off job

PARIS, France: A strike by French air traffic controllers demanding improved working conditions caused significant disruptions during...

Mediterranean

Section