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Da Afghanistan Bank Law: A Key Player in Afghanistan’s Financial System

Introduction

In a move to strengthen the country’s financial infrastructure, the government has introduced a new law governing the activities of Da Afghanistan Bank (DAB). The bank is now granted significant autonomy to regulate and supervise the country’s banking sector.

Key Provisions

The law, which comes into effect today, grants DAB the power to:

  • Formulate and execute monetary policy
  • Print and issue afghani banknotes and coins
  • Act as banker and adviser to the government
  • License and regulate banks, foreign exchange dealers, payment system operators, and securities service providers
  • Hold and manage Afghanistan’s official foreign exchange reserves
  • Promote sound and efficient systems for payments and transfers of securities issued by the state or DAB

Autonomy and Independence

The law emphasizes the importance of DAB’s autonomy and independence in its decision-making process. The bank is prohibited from seeking improper influence from any other authority and must promote its reputation as a politically autonomous central bank serving all of Afghanistan with impartiality.

Each member of the Supreme Council and the Executive Board, as well as every employee of DAB, has a duty to uphold the bank’s independence and integrity. Members of the Supreme Council are also prohibited from engaging in political activities while serving on the council.

International Cooperation

The law encourages international cooperation between DAB and other central banks and monetary authorities around the world. The bank is authorized to:

  • Represent Afghanistan in inter-governmental meetings, councils, and organizations concerning monetary policy, licensing, and supervision of banks and other persons submitted by law to its oversight
  • Provide banking services for the benefit of foreign governments, foreign central banks, and international organizations in which it or Afghanistan participates

Impact on Financial Sector

The new law is expected to have a significant impact on Afghanistan’s financial sector. It will enable DAB to play a more effective role in:

  • Promoting economic stability
  • Reducing inflation
  • Increasing access to credit for businesses and individuals
  • Improving the efficiency of payment systems
  • Increasing transparency in the country’s financial markets

Conclusion

In conclusion, the new Da Afghanistan Bank Law is a crucial step towards strengthening Afghanistan’s financial system. It grants DAB significant autonomy and authority to regulate and supervise the banking sector, promoting economic stability and growth.