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Afghanistan in crisis once again, UN issues warning regarding banking system

Afghanistan Economy: The United Nations on Monday issued an emergency report calling for immediate action to boost Afghanistan’s banks. He warned that the financial system could collapse within a few months due to citizens unable to repay loans, low deposits and cash crunch. According to a Reuters report, in a three-page report on Afghanistan’s banking and financial system, the United Nations Development Program (UNDP) said the economic cost of rebuilding the banking system when it collapses and its negative social impacts. would be very frightening. In Afghanistan, the sudden withdrawal of foreign investment due to uncertainty arising after the Taliban took power in August has worked to take the economy there into freefall.

This put a serious strain on the banking system. That’s why there was a need to set a weekly withdrawal limit to prevent running out of cash. According to the UNDP report, “Afghanistan’s financial and bank payment system is in shambles, the bank-operated problem must be resolved quickly to improve Afghanistan’s limited production capacity and prevent the banking system from collapsing.” At the same time, Abdullah-al-Dardari, UNDP chief in Afghanistan, told news agency Reuters, “We need to find a way to ensure that if we support the banking sector, we do not support the Taliban.” are doing.” He added, “Afghanistan’s banking system was weak even before the Taliban came to power, but since the foreign financial aid it received has ended, the United Nations and other aid groups have struggled to bring enough cash into the country. are.”

UNDP has introduced a proposal to protect the banking system, which includes a deposit insurance scheme, adequate liquidity for short and medium term needs, as well as credit guarantees and the option of delaying loan repayment. UNDP has also asked the Afghan financial system to work in close-coordination with international financial institutions such as the International Monetary Fund (IMF), the World Bank. Significantly, since the Taliban took power in Afghanistan, the United Nations warned that Afghanistan’s economy was likely to collapse. The UN said that the collapse of the economy could increase the refugee crisis in Afghanistan.

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