On August 15, the Afghanistan Clearinghouse began live operations with participation of all 17 commercial banks.  The Clearinghouse, operated by Da Afghanistan Bank (DAB) and supported by all 17 of Afghanistan’s licensed banking organizations, will serve as the central hub for the “bank-to-bank” interchange and settlement of low-value customer checks.  Mir Aziz Baraki, Deputy General Director of Bank Operations for DAB, representatives of 14 licensed banking organizations, and members of the Afghanistan Banks Association attended the launch.

Designed and implemented by DAB, with technical assistance from USAID’s Economic Growth and Governance Initiative (EGGI), the new Clearinghouse formalizes the exchange of checks and vastly improves the existing system of bilateral clearing between individual commercial banks.  The previous lack of a formal clearing system often resulted in lengthy delays in the process of crediting individual accounts.  With the launch of the new formalized clearance system, the banks have agreed to a next-day settlement of any check presented to the Clearinghouse, meaning that customers will receive credit for the funds within one day of presentation of the check.  This improvement in the efficiency of the clearance process is expected to foster use and acceptance of checks by the private sector, perhaps increasing the flow of deposits into the banking sector.  This system is a key step in the modernization of the payments system for Afghanistan as outlined in the Payments Roadmap adopted by the National Payment Council.