KARACHI, May 31: Eight banks operating in Pakistan have shown interest in setting up branches in Kabul — and at least one of them National Bank is expected to send a delegation to Kabul next month to study the feasibility of the project.
Visiting Governor of Da Afghanistan Bank (the central bank of Afghanistan) Dr Anwar-ul-Haq Ahady said here on Saturday that foreign banks might soon be allowed to operate from Afghanistan.
Speaking at a press conference held at the State Bank head offices he said eight banks operating in Pakistan are keen to set up branches in Kabul. He said he had given an information package to majority of these banks that they should go through to know how they could start operations in the war-torn country. He said his country was about to adopt a new law that would allow foreign banks to operate on its soil as part of plan to shape up Afghan economy.
Dr Ahady did not name the banks operating in Pakistan that are keen to set up branches in Kabul but bankers said National Bank of Pakistan and Habib Bank Ltd. are two of them. President of National Bank Syed Ali Raza told Dawn that NBP would send a delegation to Kabul within 10-12 days to explore the feasibility of opening up a branch there. He said NBP senior management discussed this issue with Dr Ahady at a luncheon meeting here on Saturday.
He said reconstruction of Afghanistan offers enough potential for banking business there adding that the setting up of branches of Pakistani banks in Kabul would enhance trade ties between the two countries. Syed Ali Raza said his bank had already sought an initial clearance from State Bank to set up a branch in Kabul. HBL officials say the bank may also send a team to Afghanistan very soon.
The names of other six banks interested in branching out into Kabul could not be known immediately but top bankers said the list also included a few big foreign banks operating in Pakistan.
REFORMS: Dr. Ahady said the central bank of Afghanistan would like to benefit from the experience of State Bank in shaping up its financial sector. “Unfortunately during the last 24 years our financial sector has been destroyed,” he said adding that his country was keen on learning from the successful banking sector reforms in Pakistan. He said the central bank of Afghanistan has requested the SBP to help in training bankers to operate in a global environment. “Unfortunately our own training facilities are either non-existent or not very well developed,” he said.
State Bank Governor Dr Ishrat Husain said while introducing his Afghan counterpart that the SBP could help the central bank of Afghanistan in organizing its financial and capital markets — and the central bank itself. He said the visiting delegation of the central bank of Afghanistan headed by Dr. Ahady had been briefed by himself and other senior officials of SBP about the banking sector reforms here. “This is the beginning of a long standing relationship between the two central banks,” he said and added that the delegation of Afghan central bank had also visited NIBAF — the National Institute for Banking and Finance and was impressed by the standard of training that the institute offers.
In response to a question Dr. Ahady said that the financial sector in Afghanistan is at an initial stage of development. So the country is seeking advice and help from the international financial institutions in all respects. He said his country is keen on learning from Pakistan to shape up its financial sector because “Pakistan’s experience is more relevant” to Afghanistan.
He said his country still lack facilities to compile reliable statistics but going by whatever statistics are available “Pakistan is the largest trade partner of Afghanistan.” He said his country’s imports from Pakistan stand around $35 million but added that “a lot of informal trade also takes place between the two countries.” He said according to available statistics his country’s imports stand at $1.6 billion and exports at just $68 million.
Dr. Ahady said efforts were under way to compile more reliable economic statistics in Afghanistan. He said that USAID experts are helping his country in this and various other areas of economy. “In fact these experts are there at all important state institutions including the central bank of Afghanistan.”
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