Afghan Banks to Lure $3 Billion ‘Idle’ Funds: Islamic Finance

Afghanistan plans to let financial institutions expand services that comply with religious law and set up standalone Islamic banks to attract investment and an estimated $3 billion its residents haven’t entrusted to banks.

The country’s central bank, Da Afghanistan Bank, is drafting legislation to enable non-Islamic banks to convert into full-fledged Shariah-compliant lenders, Muhammad Qaseem Rahimi, director general of the Financial Supervision Department, said in a telephone interview Dec. 29. Seven of the nation’s 17 financial institutions provide limited Islamic services such as loans and savings accounts, he said. The law will be submitted to parliament for approval in September.