Banking Supervision Directorate


In late 2003, following the enactment of DAB Law and Banking Law, Financial Supervision Directorate (FSD) established to discharge the DAB regulatory responsibilities. Parallel with the growth and evolution of the activities in the banking sector, the FSD has also undergone major growth over the last decade. In 2003, the FSD used to consist of only 12 employees most of whom were not familiar with advanced examination. During the following years, major efforts were exerted to increase the staff number and enhance the staff quality.  A hiring program was launched to increase the FSD staff and was coupled with an intense training program, including online courses, on-the-job training and classroom instruction, both domestically and internationally. Training focused on a variety of relevant banking supervision topics, including: financial analysis; credit analysis; liquidity management; laws and regulations; asset/liability management; and computer skills. Between 2003 and 2008, banking laws and regulations were enacted, basic bank reporting requirements were established, on-site examinations were begun on a yearly cycle, and a quarterly offsite financial review process was begun. Initial policy and procedural manuals were developed for on-site examinations and supplemented with a training program.

By Development and advancement of banking facilities, Banking Supervision activities has proportionately expanded, as the Islamic Banking and Finance Deputy Directorate and Non-Banking Deputy Directorate of Financial Supervision Directorate have restructured as separated Directorate in organization chart of DAB, by directive of H.E Supreme Council.


To have a Regulatory and supervisory framework aligned with international standards and best practices, thus enabling effective oversight over the financial system in Afghanistan.


To have a stable and sound financial system in Afghanistan where banks provide conventional banking products and services according to well established policies and procedures and based on good governance practices.


Supervise and ensure the banking activities compliance accordance with established Law, predominant Regulations, Circulars, Internal Policies and International Standards along with enforcing conditions and corrective steps towards a robust banking system. These inspections are gauged and determined with CAMEL policy and rating system, Basel principles and International Standards.

Structure and Tasks:

The present organizational structure of BankingSupervision Department is comprised of 146 positions. The department is headed by the director general that has two deputies for the following divisions:

  1. General Supervision Division;
  2. Regulatory Affairs Division.

1. General Supervision Division
The division is headed by the Deputy General Director for General Supervision and covers On-Site supervision, Information Technology and system supervision, and Off-Site analysis and surveillance.

A. On-Site Supervision: This section is comprised of seven supervisory on-site teams, which threeteams curry eight examiners, one deputy and one team leader and rest of them carry 4 examiners, one deputy and one team leader. On-site Supervision teams assess and supervise banks according to the scope of examination in accordance to their job description, and then rate the assessed areas and the bank in the scale of 1 to 5 for quality of performances. The On-site Supervision involves examination of banking operations which include evaluation of Capital, Asset Quality, Management, Earnings, and Liquidity, along with FX Position and Interest Rate Sensitivity

B. IT and System Supervision: This section is comprised of four examiners, one deputy manager and one team leader which inspect and ensure the reliability of system and generated financial figures.

C. Off-Site Analysis: This part is comprised of Off-Site analysis and surveillance, and accounting & reporting sections.

The accounting and reporting section is consisted of one section manager, one deputy section manager and four staff members. The section receives and reviews banks financial reports on monthly, quarterly and annual basis and chicks for conformity with the reporting format required by Da Afghanistan Bank (DAB). In case, misreporting or material mistakes are found, then, the section enforces charges on the violent bank in accordance with DAB laws and regulations.

The Off-site analysis and monitoring section is headed by the section manager, and consisting one deputy manager and eight staff members. The section is engaged in analyzing and evaluating the financials of banks and reports to the Deputy General Director of BankingSupervision Department. The analysis took place based on the call reports and given figures and statistics by banks, in order to make use of it in the coming On-site examinations.

2. Regulatory Affairs Division

The division is headed by the Deputy General Director for regulatory affairs include the following five sections:

  1. Licensing: This section is consisted of one section manager, one deputy manager and seven staff members who are engaged in processing and issuance of license to banks. The main tasks of the section are to collect necessary documents for evaluation of bank shareholders and boards, review bank business plan;policies and procedures prior to issuing license and conduct interviews forapproving/rejecting senior management including CEO and chief officers, supervisory board members, and audit committee members. The section also organizes all relevant affairs regarding the licensing including fees.
  2. Special Supervision/Enforcement Section: This section is comprised of one team leader, one deputy team leader and eight examiners which reviews on-site reports and major changes in off-site analysis. Subsequently, takes action mostly on the banks rated from 3 to 5 to resolve the issues, and enforces corrective and enforcement actions including fines on the violent banks which have breached the laws, regulations and DAB requirements. This section also conducts On-Site supervision in targeted areas to track the identified issues and follow up the corrective actions.
  3. Regulations Section: Regulations section has one section manager, one deputy manager and four staff members and functions for regulatory framework of Banking Supervision Department.
  4. Anti-Money Laundering and Combating Financing of Terrorism Section: This section is headed by the section manger and consists of one deputy manager and nine examiners. The section holds responsibility to assess and monitor banks in terms of money laundering and combat financing terrorism.
  5. Financial Stability: This section is comprised of one team leader, one deputy team leader and five examiners which mainly prepare the financial stability report of the country and present it to the national financial stability committee.

In Addition to aforementioned sections: The quality assurance section comprised of one team leader, one deputy team leader and six employees has established under Directorate of Banking Supervision to ensure the quality of producedreport accordance with laws, regulations and circulars.