No Afghan bank has enough money to serve customers
Law students and lawyers in Afghanistan are filing reports with JURIST on the situation there after the fall of Kabul to the Taliban. Here, a lawyer in Kabul offers his observations and perspective on new internal security measures by the new regime and ongoing issues relating to the operation of Afghan banks. For privacy and security reasons we are withholding our correspondent's name and institutional affiliation. The text has been only lightly edited to respect the author's voice.
The Taliban have instructed the security agencies to prepare a list of former government employees, ISIS affiliated persons and entities, and people who are trying to establish armed forces inside the country, according to local news sources.
This instruction was given to agencies such as Ministry of Interior, Ministry of Defense, national security departments, and governors or commanders who are in charge of security across Afghanistan. They have indicated that this should be only for the security purposes, but our concerns regarding the ex-government employees are that they are trying to identify former government officials. This could also possibly mean that they will try to identify people who stood against them, especially the military officers.
They have already frozen the bank accounts and properties of ex-government officials. However, they have not yet specifically done anything against the former military forces.
On a separate note, the Taliban have faced some major security issues in Kabul, Kandahar, and Nangarhar in the past few days. In particular, the attacks in Kabul and Nangarhar attacks were directed against the Taliban forces and at least four Taliban were killed. The Taliban confirmed the attacks and stated that ISIS was behind these attacks.
ISIS has some power in Nangarhar and some neighboring provinces. I believe they may be a major challenge to the Taliban government if no measures are taken against them. So far, we see no security plan from the Taliban government except the major appointments in high security positions.
I have an account in a bank and today went to withdraw some money we are still not allowed to withdraw more than USD 200 in a week. I know the banking operation head of this bank. I spent some time talking to him regarding the banking and finance status - according to him no bank has enough money to serve its customers at the moment. Previously, the central bank used to provide them with AFN as well as USD twice or once a week but now - he said they rarely receive cash from the central bank.
According to him, this week they only received USD 50,000 from the central bank which is not enough for their customers. This means the central bank is almost out of USD cash and soon some banks will stop their services in USD. According to my understanding this also means that soon some banks will have to close their doors to its customers.
USD cash was provided to the commercial banks and Foreign
Exchange Dealers and Money Services Providers through an online auction procedure. There is no auction being held these days due to unavailability of cash in the central bank. The participants to these auctions usually received from USD 5 to 10 million. Furthermore, he told me that most banks including theirs sometimes use from their reserves to serve the customers.
When it comes to banking and finance the ex-government has put some measures to obtain public's trust on banking sector which is damaged these days. There are no new customers to banks and the people who line up behind banks are only there to withdraw money.