Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
|PDS Creation Date||17 Feb 2006|
|PDS Updated as of||24 Sep 2014|
|Project Name||AFG: AFGHANISTAN INTERNATIONAL BANK|
|Borrower/Equity Investment Name||AFGHANISTAN INTERNATIONAL BANK|
|In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.|
|Subsector||Banking systems and nonbank financial institutions|
|Drivers of Change||–|
|Gender Equity and Mainstreaming Categories||–|
AFGHANISTAN INTERNATIONAL BANK
|Type/Modality of Assistance||Approval Number||Source of Funding||Approved Amount (thousand)|
For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories
AIB is classified as a financial intermediary based on ADB's Environment Policy, which requires AIB to (i) adhere to ADB's Environment Policy and Environmental Assessment Guidelines, (ii) adhere to ADB's policies on involntary resettlement and indigenous peoples, and (iii) acknowledge that all borrowers comply with Afghanistan's health, safety, and environmental regulations and standards, and public consultation requirements. AIB has complied with these policies and no breach has occured. AIB also has environmental due diligence policies and procedures that are embedded in its documents, specifically in its artictles of association and credit policy. The bank's enviromental management system (EMS) includes an exlusion list of prohibited industries, which is an integral part of its credit risk management. AIB conducts environmental due diligency, and applies the equator principles in relation to its EMS. It has complied with ADB's social safeguard policies and no involuntary resettlement or impact on indigenous peoples resulted from its activities.
No involuntary resettlement resulted from its activities.
No impact on indigenous peoples resulted from its activities.
|The Project is to create one of Afghanistan's first private financial institutions. AIB will provide a range of financial services - including credit and savings, payment transfers, trade finance and SME lending. The bank will also aggressively market to NGOs and donor organizations as potential clients in order to support the efficient and secure mobilization of the capital necessary to facilitate Afghanistan's reconstruction efforts.|
|The establishment of AIB is expected to have significant development impact by facilitating the emergence of the financial sector and a demonstration effect through the dissemination of best practice standards, in the development of the commercial banking sector in Afghanistan. AIB's existence early on in the emergence of Afghanistan's economy will facilitate the development of the banking regulatory and supervisory structure since the Central Bank will have daily interaction with bank management that possesses formidable experience in the operation of financial institutions in developing or transitioning economies.|
|The Project is consistent with ADB s strategy for private sector operations, which gives priority to investments in the financial sector.|
|Description of Project Outputs
|Status of Implementation Progress (Outputs, Activities, and Issues)
|Status of Development Objectives
ADB, as a key investor, continues to demonstrate its commitment and support to AIB, helping in the area of corporate governance, risk management, training and supervision through its presence on the Supervisory Board of the Bank. The Board consists of 5 independent members, in addition to 4 representing the shareholders, bringing in line with international best practices.
|Status of Operation / Construction
ADB's presence in Afghanistan's finance sector has catalyzed the entry of more international financial institutions (IFIs). Five local banks and six IFIs entered the financial market since 2008. Although the number is quite insignificant relative to foreign entrants in the People's Republic of China or India, the said addition was considered a major milestone for Afghanistan given the bleak business environment after years of war and continuing insurgency. In this regard, private sector development is rated 'excellent'. ADB's assistance had a positive effect on AIB, as evidenced by AIB's good reputation and market position in Afghanistan's finance sector. The bank prioritzed the adoption and implementation of sound corporate governance and stronger internal control policies and procedures. This has helped it gain public trust and confidence, which translated to a remarkable financial performance in 2008. Profitability jumped from a net loss in 2007 to a net profit of AF611.58 million in 2008. The continued strong performance has allowed the bank to pay 100% bonus shares in 2009 and a cash dividend amounting to $10 million in 2010. By the end of 2013, AIB was the largest Private Sector Bank in Afghanistan, with 32 branches, four cash outlets and over 30 ATMs.
|Date of First Listing||–|
|Procurement and Consulting Notices
|Concept Clearance||28 Jan 2003|
|Due Diligence Mission||23 Feb 2004 to 25 Feb 2004|
|Investment Committee Meeting||–|
|Approval||13 May 2004|
|Responsible ADB Officer||Hasib Ahmed (email@example.com)|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Divisions||Private Sector Financial Institutions Division|
|List of Project Documents||http://www.adb.org/projects/37903-014/documents|