Kabul residents say they have lost their trust in the banking system following the collapse of the previous government. According to them, banks only have credibility in a country when that country enjoys political and economic stability. They emphasize that due to distrust in banks, most people now use the hawala system for money transfers. These residents say that to regain public trust, banks must operate transparently and implement reforms in the banking system.
Kabul residents say that, in addition to the government’s collapse and withdrawal restrictions, corruption, weak management, and lack of adequate services in banks have also increased distrust in these institutions. However, some others among them state that they still trust banks, because in their belief, banks have international credibility and security.
Shafiqa, one of the Kabul residents, recently withdrew her bank deposit and closed her account. She says that after the collapse of the previous government, restrictions on withdrawal limits caused her to no longer keep her money in the bank. She adds, “The credibility of banks collapsed at that very time, because when people needed money, they couldn’t withdraw from the bank. Now I try to keep my money at home like before, because if disorder occurs again, at least the money is with me. After the collapse, the bank gave us a lot of trouble when we wanted to get money.”
The Taliban initially set the withdrawal limit from each bank account at $200 per week, but now this limit has been increased to $20,000 per month.
Abdullah, another Kabul resident, considers the credibility of banks dependent on the country’s stability. He says that in current conditions, he is not prepared to deposit his savings in the bank, because conditions might become unstable again, and he could face financial problems.
He adds, “Banks are trustworthy when a country has stability; in that case, people can comfortably place their money and valuables in banks. But in conditions of instability, like the months after the republic’s collapse, all those who had placed their money in banks couldn’t even fully withdraw it when needed. I personally don’t trust banks and don’t think anyone should deposit their money in banks under current conditions.”
Hamid, another Kabul resident, says that after the collapse of the previous government, the credibility of banks has decreased for him. He adds that banks have lost their past credibility under current conditions, and withdrawal limit restrictions have created many problems for people.
This Kabul resident adds: “Now even the bank ATMs run out of money after evening and are depleted. People don’t trust banks, and banks don’t trust people. People experienced these developments once and saw how conditions were. If conditions remain unstable again, people will no longer put their money in banks.”
Hussain, however, unlike some other Kabul residents, says he trusts banks because, in his belief, these institutions have international security. He adds, “If we deposit our money in banks, not only is it safe, but we also receive interest. The credibility of banks is one hundred percent because they have high security. In one case, money remains in the bank or can be withdrawn with difficulty, which is when the government changes. Because until systems are properly established, if someone withdraws all their money, again the money of that country loses its value. When the Taliban came, conditions were like this.”
Naser, one of the Kabul residents, says that during the republic era, people had just begun turning to banks, but the government’s collapse destroyed this interest. According to him, the banks’ inability to return people’s deposits has caused banking services to become worthless to customers.
This Kabul resident notes: “People’s trust decreased after the government’s collapse and withdrawal limit problems, because banks were unable to pay people’s deposits. I myself have little trust in banks, and as long as I don’t face serious problems, I don’t use banks. For example, if I don’t have a secure place to keep money, I can’t trust banks.”
Ali, an employee of a private bank in Kabul, believes that implementing strict restrictions on withdrawing money from personal accounts has damaged the credibility of banks. He says, “Now the Taliban collects taxes from companies based on their income, and for this reason, many companies don’t bring their money to banks.”
This Kabul resident adds: “Since the government collapsed, people’s money in banks has been frozen. People can now withdraw five thousand weekly and $20,000 monthly. This restriction has improved compared to the past, and its chart shows that conditions have improved somewhat, and people are bringing their money to banks. But large companies and exchange houses no longer trust banks, because the government’s collapse dealt them a major blow. When millions of dollars of their money remains frozen in banks, businesses collapse.”
Meanwhile, some economic experts say that banking restrictions, sanctions, and pressures imposed on banks have been among the factors that have caused people’s distrust in the banking system. They add that when people’s trust in a country’s financial system decreases, this issue can lead to inflation and a decline in the value of the national currency.
Abdul Nasir Reshtia, an expert on economic affairs, says in this regard: “When people become distrustful of banks and don’t withdraw their money from banks, banks are no longer able to finance large projects and, in fact, cannot return people’s deposits to them. But when banks’ credibility increases, banks will be able to finance large projects and create opportunities that lead to economic growth and job creation for people. Overall, this matter can properly manage and organize a country’s financial system.”
Seyar Quraishi, another expert on economic affairs, adds: “The roots of distrust in Afghanistan’s banking and financial system go back to several important and continuous events. In the first step, the scandal and bankruptcy of Kabul Bank in 2010 destroyed people’s widespread trust and revealed extensive embezzlement by influential individuals. After that, widespread corruption and lack of effective oversight of bank activities continued. The liquidity crisis after the collapse of the republican system in 2021 and the freezing of Afghanistan’s assets abroad also caused people to not have free access to their savings, and this issue deepened the distrust.”
Economic experts emphasize that to regain people’s trust, banks must guarantee depositors’ security, implement transparency and fundamental reforms, have serious oversight of their performance, and fight corruption decisively. They also consider providing smooth and easy services in the area of withdrawal and money transfer as a serious need in this matter.
These experts warn that if these problems are not resolved, the country’s banking system will face the risk of becoming irrelevant, and Afghanistan will become increasingly isolated from the international financial system.
Previously, the World Bank, in its report in April 2024, had also announced that Afghanistan’s banks have lost about 25 percent of their total deposits since 2020, “which is a worrying trend for the small banking industry in this country.”
You can read the Persian version of this report here:
