Taliban want to replace conventional banking system with Islamic banking

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Law students and lawyers in Afghanistan are filing reports with JURIST on the situation there after the Taliban takeover. Here, a Staff Correspondent for JURIST in Kabul reports on recent changes to laws affecting the banking and financial sector of Afghanistan.

For privacy and security reasons, we are withholding our Correspondent’s name. The text has only been lightly edited to respect the author’s voice.

The Taliban-led Central Bank of Afghanistan has established a committee to review and amend the Central Bank Law and the Banking Law of Afghanistan. According to the Central Bank, a seven-member committee is set up to study and propose amendments to the Central Bank Law.

The committee has to adjust the legal framework of the Central Bank with the Islamic banking system and eliminate the conventional banking system.

The Central Bank Law is almost sixty years old and does not provide any grounds for an Islamic banking system. Instead, the Banking Law provides mechanisms through which Islamic and conventional systems can be implemented.

The commercial banks have special windows for Islamic banking which are regulated by the Central Bank-issued regulatory framework.

The banking sector has assisted in economic development of Afghanistan throughout the past two decades and Islamic banking is widely one of the fastest growing sector not only in Afghanistan but in the Middle East market.— JURIST

 

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