Afghanistan’s central bank, Da Afghanistan Bank (DAB) and Harakat- Afghanistan Investment Climate Facility Organization signed an agreement on the implementation of the Shariah Compliant Project.

The Shariah Compliant Project is aimed at tackling problems of the Islamic Banking, which is seen as one of the biggest challenges facing the Afghan banking system.

DAB officials were hopeful that the project would help strengthen the banking and financial sector in the country.

As per the agreement, Harakat provided DAB with USD 1,175,600 grant fund for the implementation of the project that contributes in the following areas:

-          Development of Shariah banking regulatory framework (regulations, manuals, guidelines, accounting and reporting formats, off-site an on-site analysis policy and other necessary policies and procedures for Shariah Compliant demand driven products

-          Development of Shariah Supervisory Board (SSB) governor Structure and Shariah Products Approval Procedure

-          Development of market driven Shariah Compliant Products. The products would be offered as a new Shariah-Compliant offering by the banks.

-          Development of a visual/pictorial SMEs Access to Finance Toolkit. The toolkit will be developed in a way that is understandable by illiterate and semi illiterate entrepreneurs.

-          Increase awareness and capacity building to strengthen Islamic Banking Division’s capacity of DAB as well as Islamic Financial Institutions in Afghanistan and relevant stakeholders.