UN says Afghan banking system on verge of collapse

PESHAWAR – A United Nations agency warning last week that Afghanistan’s banking sector was on the verge of collapse did not come as a surprise to those who had forecast an early financial meltdown in the face of receding foreign aid and assistance to the country. 

Predicting a complete breakdown of the Afghan financial system over the coming few months, the United Nations Development Program (UNDP), in a report published last week, claimed that if the world did not come to the rescue, Afghan trade and humanitarian assistance would soon come to a grinding halt.

The UNDP report, analyzing the Afghan banking industry’s performance over the past nine months, concluded that the non-performing loans – a loan in which the borrower defaults in payments of the principal or interest for some time – rose to 57% in September from 27% at the beginning of the year.

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