Bank Alfalah Advances Exit From Afghanistan

Bank Alfalah Moves Closer to Exiting Afghanistan After Securing Regulatory Clearances for Proposed Divestment.

Bank Alfalah Limited, one of Pakistan’s largest commercial banks, has moved closer to exiting Afghanistan after securing regulatory clearances to advance the proposed divestment of its operations there, according to filings cited by Pakistan’s Business Recorder.

The bank disclosed to the Pakistan Stock Exchange on Tuesday that it has received in-principle approval from the State Bank of Pakistan (SBP), while Afghanistan’s central bank has also granted consent, allowing Ghazanfar Bank to begin due diligence.

Bank Alfalah said it had earlier received a non-binding offer from Ghazanfar Bank to acquire its Afghanistan operations, and that it will now allow the Afghan lender to proceed with a detailed review of its business.

The lender stressed that the proposed transaction remains at an exploratory stage and does not yet constitute a binding agreement between the two banks.

Foreign banks operating in Afghanistan have faced growing constraints since the Taliban returned to power in 2021, including sanctions-related compliance risks, restrictions on cross-border transactions and a prolonged economic downturn.

International financial institutions and analysts have repeatedly warned that Afghanistan’s banking sector continues to struggle with limited access to global financial systems, weak liquidity and declining investor confidence.

Bank Alfalah said the deal will be subject to the satisfactory completion of due diligence, execution of definitive agreements, compliance with all applicable laws and receipt of all required regulatory and legal approvals in both Pakistan and Afghanistan.

Industry analysts say that if the divestment is completed, it would mark a significant strategic shift for Bank Alfalah, which has operated in Afghanistan for several years and is majority owned by Abu Dhabi-based investors, underscoring a broader retreat by foreign banks from the Afghanistan market.

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