Afghanistan Central Bank Disapproves Acquisition of Bank Alfalah Operations

Bank Alfalah’s exit strategy from Afghanistan did not work as the acquiring bank failed to get the approval from the central bank of Afghanistan.

According to the official statement, the central bank of Afghanistan, Da Afghanistan Bank declined the application of Azizi Bank, the acquiring bank, to obtain or acquire activities of Bank Alfalah.

The management of Bank Alfalah has been in talks with the management of Azizi Bank of Afghanistan on a proposed deal of selling out its operations and assets. The two banks agreed, in principle, to proceed with the deal provided the concerned banking regulatory authority approved of it.

The management of the bank might explore new options in Afghanistan including a similar deal with a different bank in the future, to remove the objection of Afghanistan’s central bank, or to retain its operations for next couple of years.

Bank Alfalah Limited started its operations in Afghanistan in 2005 and is providing conventional banking services in Kabul and Herat. Islamic Banking services are also provided in Kabul. It claims to be the largest foreign bank in Afghanistan with a balance sheet value of around $300 Million as of December 31, 2013.

The bank’s present asset value stands at Rs 22.5 billion while the liabilities stand at Rs. 20.4 billion.

Bank of Alfalah (Afghanistan) is a mainstream partner of Citibank NA in Afghanistan for processing Department of Defense USA payments to the local market. It is the only financial institution in Afghanistan that has a primary relationship with VISA, according to its website.

The bank in Afghanistan maintains a sound correspondent network across the globe comprising of Citibank (USA), Commerzbank(Germany), Habib American Bank (USA), United National Bank (UK) etc..