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.
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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 GlobalDataA 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.
