Directorate of Non-Banking Financial Institutions Supervision

Non-Banking Financial Institutions are financial entities that, like banks, provide financial services, but each non-banking financial institution varies in regard to the nature of work and holds a special license based on their specific activities. Those NBFIs which are currently working in Afghanistan and have obtained their licenses from Da Afghanistan Bank include entities such as FX dealers, money service providers, electronic money services, and financial leasing.

NBFIs play an important role in supporting financially the weak economic sector, expanding sustainable economic development, providing significant employment opportunities, providing loans and other financial services to the low-income group who do not have access to banking services. Afghanistan has a large number of NBFIs which include 3200 money service providing entities and FX dealers who have obtained licenses from Da Afghanistan Bank. Likewise, there are 3 electronic money institutions and 12 micro-finance and financial leasing institutions, as well.

Financial institutions such as FX dealers and financial services has a long history in Afghanistan's financial sector, therefore, the strategy of Da Afghanistan Bank is based on standardizing these institutions in accordance with law and regulations and international standards so that issues like consumer protection, anti-money laundering, and terrorism financing are strictly implemented.

At the end of the year 1398, Directorate of NBFI Supervision was established to conduct regulatory and supervisory duties concerning the system of NBFIs.  Along with the development of activities of the banking sector, the NBFIs Supervision department also experienced significant growth.

Vision:

To have a sound sector of NBFIs that is able to promote the financial sector along with the banking sector and play a significant part in the economic growth and development of the country.

Objectives:

  • To ensure continuously the sound performance of the NBFIs;
  • To create a proper framework for developing the NBFIs sector;
  • To take measures for preventing illegal activities of the institutions;
  • To protect the financial sector's consumers;
  • To protect unlicensed deposits and black money in the NBFIs sector;
  • To limit the danger of money-laundering and terrorism financing through a comprehensive regulatory and supervisory framework;
  • To prepare a proper methodology for FinTech in Afghanistan aimed at the financial sector's growth;

Duties and Responsibilities:

In addition to conducting on-site and off-site supervision, the Directorate of NBFIs Supervision takes corrective and enforcement measures including the issuance of cash penalties concerning NBFIs that breach the laws and regulations and the banking procedures.

Organization Chart and Duties

The current organization structure of NBFIs Supervision Directorate is composed of several positions.  One General Directorate and two deputies in general directorates of supervisory and regulatory sections are included in the organization structure.

Deputy Directorate of Supervision

This section consists of four departments which include FX dealers and money services management, e-money service system provider’s supervision management, and financial lease services providers’ supervision management. These departments conduct all affairs of on-sight and off-sight supervision of the concerned companies.

Deputy Directorate of Regulatory Affairs

This section consists of three departments which include anti-money laundering and terrorism financing department, Non-banking licensing department, and research and development of regulations. These departments conduct all regulatory, licensing, and anti-money laundering and terrorism financing affairs.