Afghanistan is moving further toward a fully Islamic banking system, with central bank officials saying interest-based operations have been suspended across all commercial banks in the country. According to Da Afghanistan Bank-linked reporting, financial services are now being structured around Islamic contracts rather than conventional interest-bearing models.
The transition is part of a wider effort by the Taliban-led authorities to eliminate riba, or interest, from the banking sector and align financial activity with Islamic principles. Afghanistan’s central bank had already issued formal guidance for converting conventional banks into Islamic banks, showing that the policy has been developing for several years.
Officials say the aim is to build a banking system based on Sharia-compliant financing, though analysts note the transition still faces major practical challenges, including weak public trust, limited liquidity and restrictions on Afghanistan’s wider financial sector. The move is likely to draw wider attention across the Muslim world, where debates over interest-free finance and Islamic banking continue to grow.
