ICD, Da Afghanistan Bank and ABA Support in Transforming the Islamic Finance Industry in Afghanistan

Kabul, AFGHANISTAN, 28 June 2021 - A webinar was held today jointly by the Islamic Corporation for the Development of the Private Sector (ICD) and Afghanistan Banks Association (ABA), in collaboration with Da Afghanistan Bank (Central Bank). The webinar was organized with the support of the Islamic Development Bank Group Business Forum “THIQAH” (a function under the umbrella of ICD), with the theme “The Transformation of the Islamic Finance Industry in Afghanistan”. The event was attended by many delegates from the Central Bank, government entities, and Islamic and conventional banks in the country.

The event was officiated by Mr. Ahmed A Khalid, Regional Head - Asia, ICD and followed by the welcoming remarks from Dr. Muhammad Yusuf Saleem, Director General, Islamic Banking and Financial Services Department of Da Afghanistan Bank, and Mr. Najibullah Amiri, Executive Director, Afghanistan Banks Association.

The webinar aims to support the Central Bank of Afghanistan’s initiatives on the transformation of the Islamic finance industry in the country by showcasing ICD’s products and services available for banks and non-bank financial institutions in Afghanistan. The webinar provided a platform for a constructive and fruitful dialogue between the various constituencies and addressed topics of common interest to identify concrete ways and effective solutions to support the development of Islamic finance in the country.

As a member state of ICD, Afghanistan views Islamic finance as a means to stimulate growth in key economic sectors, as well as a gateway for the country to build stronger ties in trade and investment with other member countries of ICD.

“Moving forward, ICD and ABA with strong support from the Central Bank of

Afghanistan will continue to work closely to heighten awareness and understanding of the Shari’ah system for the banking sector and iron out issues that may arise. To date, ICD has extensive experience in providing financial advisory and sound technical solutions to banks and non-banking financial institutions interested in converting to Shariah-compliant outfits. We believe that our support, in addition to the clarity in the government regulations, will further develop the Islamic banking industry in Afghanistan and subsequently, attract overseas investors from ICD’s member countries,” said Mr Ayman Sejiny, the CEO of ICD.

Dr. Muhammad Yusuf Saleem, Director General of the Islamic Banking and Financial Services Department at the Central Bank of Afghanistan stated that "One of our responsibilities is to develop the Islamic banking industry in Afghanistan, as it is still far from its potential. This webinar is a platform for us to give detailed explanations on the support and role of the Central Bank and ICD to the financial institutions to further develop their Shari’ah compliant business. We hope this webinar has provided valuable insight to delegates and sparked interest among the country’s private sector players to consider transitioning into Shariah-compliant outfits to leverage on the ICD’s Line of Finance that can support many private enterprises in the country.”

Mr. Najibullah Amiri, Executive Director, Afghanistan Banks Association stated that "I believe that ICD-IDB, DAB, and ABA close coordination & cooperation in the Afghan banking sector, particularly Islamic banking, is direly needed just because that Afghanistan is represented by 99% Muslims who are excited to implement Shariah-based banking practices. Beside this, the Islamic Banking Development will play a critical role toward financial inclusion of the country.”

Dr. Mohammad Salem Omaid, chairman ABA, during his closing remarks said " This webinar and the topic of the discussion is very significant because Islamic Banking is highly needed in this country and wish of the general public. I would like to extend my warm gratitude to ICD and ABA for taking such an initiative and providing consultancy to Afghan Banks for conversion to Islamic Banking. Let’s impart the experience of Islamic Banking in its true spirit and soul.”

Through this webinar, ICD and ABA aimed to impart the know-how related to the implementation of Shari’ah standards and the conversion of banks which already have Islamic units to become full-fledged Islamic banks. It is worth mentioning that ICD has successfully completed several conversions in CIS countries, such as Uzbekistan and others along with the opening of Islamic windows for several conventional Banks.   ICD also established an Islamic window for Afriland First Bank in Cameroon as a transitory step toward full conversion.

About the Islamic Corporation for the Development of the Private Sector (ICD)

The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and is a member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999 to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to the governments and private companies, and encouraging cross-border investments. 

ICD is Rated A2’ by Moody’s, ‘A-’ by S&P and, A+ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collective financing. ICD also applies financial technology (Fintech) to make financing more efficient and comprehensive. For more information, visit: www.icd-ps.org

About Da Afghanistan Bank (Central Bank, DAB)

Da Afghanistan Bank (DAB) is the Central Bank of Afghanistan which was established in 1939 to regulate all banking and money handling operations in Afghanistan. DAB is also active in developing policies to promote financial inclusion and a member of the Alliance for Financial Inclusion. The bank currently has 46 branches throughout the country, with five of these situated in Kabul, where the headquarters is also based.

For more information about DAB, visit www.dab.gov.af.

About Afghanistan Banks Association

Afghanistan Banks Association (ABA) is a non-political, non-government, not for profit, and independent association established in September 2004 to meet the needs of the growing banking sector as a united body representing all banks to serve as their voice in dialogues with the Da Afghanistan Bank (DAB), the Government and other stakeholders. ABA was initially founded by 9 licensed banks, but membership has since grown to include 12 duly licensed banks. ABA strives to promote a strong, healthy, and competitive banking industry in Afghanistan, and it represents the common interests of the Afghanistan banking sector. ABA is funded primarily by its member banks but is empowered to generate its own revenues and to accept donor funding.

For more information about ABA, visit www.aba.org.af.