In Kabul and provinces like Nangarhar, Afghans’ trust in banks continues to erode due to persistent liquidity shortages, withdrawal limits, and the absence of a clear economic plan since the Taliban’s return to power in August 2021.
Key Points:
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Economic Decline: Afghanistan’s GDP fell by 26% between 2021–2022. $7 billion in central bank assets remain frozen abroad, largely in the U.S. and Switzerland.
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Public Distrust: Many citizens prefer traditional money changers or storing cash at home, fearing they won’t be able to withdraw from banks when needed.
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Banking Limits: The central bank has gradually raised withdrawal caps (up to 350,000 Afghanis weekly and 1 million monthly in local currency, or $5,000 weekly/$15,000 monthly in USD), but liquidity remains a major challenge.
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Islamic Banking Shift: The Taliban aims to fully convert the banking system to Islamic finance by mid-2025, replacing interest-based transactions with Sharia-compliant mechanisms like qard hasan (interest-free loans) and mudarabah (profit-sharing). Experts warn that the lack of skilled banking and Sharia personnel, plus the absence of a civil constitution, may hinder implementation.
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Structural Problems: Analysts note that the crisis stems not just from cash shortages, but also from sanctions, frozen assets, and the exodus of skilled bankers. This affects trade, agriculture, and employment, with poverty rates still near 97%.
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Reform Suggestions: Proposals include creating a deposit guarantee fund, digitizing banking infrastructure, and pushing for sanctions relief to restore financial stability.
Bottom Line: Without structural reforms, international engagement, and restored liquidity, Afghanistan’s banking sector may remain crippled — and public trust unlikely to return.
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