Islamic Bank of Afghanistan (IBA) has received the licence from the country’s central bank to operate as a sharia compliant financial institution.

The central bank of the country, Da Afghanistan Bank, awarded the licence to IBA after it completed the conversion of its balance sheet, a senior bank official told Reuters.

IBA started converting its all assets from January this year in order to fulfil all principles of Islamic financing system.

These religious principles include bans on gambling, alcohol and interest-bearing debt.

Earlier known as Bakhtar Bank, IBA operated as a conventional banking system following its acquisition by Azizi Bank in 2009.

As of December last year, the bank has $187m of deposits and a network of 59 branches across the country.

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By GlobalData

A banking official told Reuters that IBA intends to double its revenue over the next two years.

According to an estimate by IBA, only 5.7% of the Afghanistan population have access to banking services. The introduction of Islamic banking in the country is expected to bring more people under banking.

In 2015, Afghanistan central bank issued a regulatory structure for Islamic banking in the country which is devised on the framework issued by the Accounting and Auditing Organisation for Islamic Financial Institutions.