Afghanistan’s Central Bank Outlines Procedures for Islamic Banking
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The Da Afghanistan Bank (DAB), the central bank of Afghanistan, has released a comprehensive manual outlining procedures for Islamic banking in the country. The 17-page manual provides guidelines on various aspects of Islamic banking, including profit sharing investment accounts, late payment charges, product transparency and disclosure, and Shariah resolutions.
Key Features of the Manual
- Outlines procedures for Profit Sharing Investment Accounts (PSIA) and sets out minimum qualifying requirements for banks to accord PSIA
- Provides guidelines on how banks can structure their PSIA products to comply with Shariah law and ensure transparency and fairness for customers
- Outlines procedures for handling late payment charges, which must be fair and reasonable according to Shariah principles
- Requires banks to provide clear information to customers about the terms and conditions of their accounts, including any late payment charges
- Sets out guidelines on product development, requiring banks to develop Shariah-compliant products that meet the needs of their customers while also ensuring they are competitive and profitable
Purpose of the Manual
The manual is intended to assist banks in developing a Shariah-compliant Islamic banking business and to provide a framework for regulatory oversight. It is available to all banks operating in Afghanistan and is expected to help promote the growth and development of Islamic banking in the country.
About Da Afghanistan Bank
Da Afghanistan Bank (DAB) is the central bank of Afghanistan, responsible for regulating and supervising the financial system in the country. DAB’s mission is to:
- Maintain price stability
- Ensure financial stability
- Promote economic growth and development through sound monetary policy and effective regulation
With this comprehensive manual, Da Afghanistan Bank aims to promote a robust and Shariah-compliant Islamic banking sector in Afghanistan, which will contribute to the country’s economic growth and development.