What is bank? Bank is an intermediary financial institution that gets loans from people by a certain rate of interest, and gives them to needy people in upper rate of interest. So, the difference is the bank profit and covers its expenditures.
The word bank is derived from the German word of “Bank” that indicates a kind of company or from Italian word of “Banco” that means a seat, which is hinting the tables that for the first time financial activities started in and grew to the banks.
The basic duty of a financial system is to create a relationship between the investors and needy people. The good performance is possible only by a professional and efficient financial system which is including financial institutions, financial bazaars, financial instruments, financial policy makers and the financial laws. It connects all the bazaars of agriculture, industry, accommodation and so more together, and provide them funds by each other. Bank is a financial and services institution that has a remarkable role in movement cycle of money and wealth. It shows its important role in economy. The banks’ efficient and positive activities cause the economical, services and production activities to grow up more and more. Every day, the banks get more vital role in the economy.
For the first time in 1932 in Afghanistan, a joint stock company established by name of Hashimi that then changed in 1933 to Afghan National Bank. The second bank was the central bank of Afghanistan which established in 1939 in Kabul with investment of 120 millions of Afghani. Then in 1975 the capital of central bank of Afghanistan increased to one billion of Afghani. After that Agriculture development bank of Afghanistan and Pashtani bank established. Afghanistan’s banking system damaged in three decades of anarchy and civil war. It was prevented from development. Fortunately, after the dark period of the Taliban tyrannical regime, new rules and regulations approved for the banks and private banking system of Afghanistan. Afghanistan’s government tried to help and support the private banks, beside development of the state banks. These banks help the creation of a modern financial system.
So, the private banks started to establish and now there are seventeen state and private banks in Afghanistan as following:
Central Bank of Afghanistan
Afghan National Bank
First Microfinance Bank
Afghan United Bank
International Banks of Afghanistan
Foreign Banks Branches in Afghanistan
Punjab National Bank
National Bank of Pakistan
Habib Bank limited Pakistan
Alflah Bank of Pakistan
Standard Chartered Bank