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UN warns of ‘colossal’ collapse of Afghan banking system

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The United Nations on Monday pushed for urgent action to prop up Afghanistan’s banks, warning that a spike in people unable to repay loans, lower deposits and a cash liquidity crunch could cause the financial system to collapse within months.

In a three-page report on Afghanistan’s banking and financial system seen by Reuters, the U.N. Development Programme (UNDP) said the economic cost of a banking system collapse – and consequent negative social impact – “would be colossal.”

An abrupt withdrawal of most foreign development support after the Islamic Emirate of Afghanistan (IEA) seized power on August 15 from Afghanistan’s Western-backed government has sent the economy into freefall, putting a severe strain on the banking system which set weekly withdrawal limits to stop a run on deposits.

“Afghanistan’s financial and bank payment systems are in disarray. The bank-run problem must be resolved quickly to improve Afghanistan’s limited production capacity and prevent the banking system from collapsing,” the UNDP report said.

Finding a way to avert a collapse is complicated by international and unilateral sanctions on IEA leaders, Reuters reported.

“We need to find a way to make sure that if we support the banking sector, we are not supporting Taliban (IEA),” Abdallah al Dardari, head of UNDP in Afghanistan, told Reuters.

“We are in such a dire situation that we need to think of all possible options and we have to think outside the box,” he said. “What used to be three months ago unthinkable has to become thinkable now.”

Afghanistan’s banking system was already vulnerable before the IEA came to power. But since then development aid has dried up, billions of dollars in Afghan assets have been frozen abroad, and the United Nations and aid groups are now struggling to get enough cash into the country.

The UNDP’s proposals to save the banking system include a deposit insurance scheme, measures to ensure adequate liquidity for short- and medium-term needs, as well as credit guarantees and loan repayment delay options.

“Coordination with the International Financial Institutions, with their extensive experience of the Afghan financial system, would be critical to this process,” UNDP said in its report, referring to the World Bank and International Monetary Fund.

The United Nations has repeatedly warned since the IEA took over that Afghanistan’s economy is on the brink of a collapse that would likely further fuel a refugee crisis. UNDP said that if the banking system fails, it could take decades to rebuild.

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UN warns restrictions on Afghan women are hindering aid delivery

The UN stressed that systematic discrimination against women and girls is not in Afghanistan’s interest and must end without delay.

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The United Nations has warned that ongoing restrictions on Afghan women working with the UN continue to undermine the delivery of life-saving humanitarian assistance across the country.

The UN Office of the High Commissioner for Human Rights (OHCHR) said that 100 days after Afghan women staff were barred from accessing UN premises, the measures remain in place and are significantly obstructing aid operations.

In a statement, the office called on the authorities to immediately lift all such restrictions.

“Marking 100 days since Afghan women colleagues were prohibited from accessing UN premises, we call on the de facto authorities to lift all such restrictions so that critical support can reach everyone in need,” the statement said.

The UN stressed that systematic discrimination against women and girls is not in Afghanistan’s interest and must end without delay.

It warned that excluding women from humanitarian work has weakened the reach and effectiveness of aid delivery, particularly in communities where female staff are essential to accessing women, children and other vulnerable groups.

According to the UN, the absence of women humanitarian workers has reduced the ability of aid agencies to assess needs, deliver assistance and monitor programs effectively, at a time when millions of Afghans depend on humanitarian support.

Reiterating its position, the United Nations emphasized that the full participation of women in humanitarian activities is critical to addressing the country’s urgent needs and ensuring aid reaches all segments of the population.

The UN has repeatedly urged Afghan authorities to reverse policies restricting women’s participation in public life, warning that continued limitations risk deepening the humanitarian crisis and isolating Afghanistan further from the international community.

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Millions face acute food insecurity in Afghanistan as winter approaches, UN warns

The European Union has pledged €1 million in humanitarian funding along with 130 tonnes of in-kind assistance, while the United Kingdom announced £1 million in additional aid.

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More than 17 million people in Afghanistan are expected to face crisis levels of hunger during the coming winter months, according to a new warning from the United Nations and the Integrated Food Security Phase Classification (IPC), the leading global authority on hunger crises.

The IPC reported that worsening economic conditions, recurrent drought, shrinking international aid and the return of large numbers of Afghans from neighboring Iran and Pakistan have placed severe pressure on the country’s food security. The situation marks a sharp deterioration compared with last year.

“What the IPC tells us is that more than 17 million people in Afghanistan are facing acute food insecurity. That is three million more than last year,” said Jean-Martin Bauer, Director of Food Security at the UN World Food Programme (WFP), speaking to reporters in Geneva. Bauer added that nearly four million children are suffering from acute malnutrition.

“About one million of them are severely acutely malnourished and require hospital treatment,” he said.

The IPC report said food assistance currently reaches only 2.7 percent of Afghanistan’s population, a figure further undermined by high unemployment, a weak economy and declining remittances from Afghans living abroad.

According to the assessment, more than one-third of the population is projected to experience crisis-level food insecurity between now and March 2026, with as many as 4.7 million people at risk of falling into emergency levels of hunger.

The humanitarian situation has been compounded by a magnitude 6.0 earthquake that struck eastern Kunar province in September, killing more than 2,200 people and prompting aid agencies to appeal for increased international support.

The European Union has pledged €1 million in humanitarian funding along with 130 tonnes of in-kind assistance, while the United Kingdom announced £1 million in additional aid.

However, aid agencies say overall funding remains critically low. International humanitarian assistance to Afghanistan has dropped sharply since the Islamic Emirate of Afghanistan (IEA) returned to power in 2021.

By September, only 28 percent of the 2025 humanitarian funding target had been met. The United States, once the largest donor, significantly reduced its support earlier this year.

With winter approaching and resources stretched thin, UN agencies warn that without urgent funding and expanded food assistance, millions of Afghans face an increasingly severe humanitarian crisis.

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High-level Kyrgyz delegation arrives in Kabul

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The Ministry of Industry and Commerce announced on Tuesday that a high-level delegation from Kyrgyzstan has arrived in Kabul.

According to the ministry’s statement, the purpose of the delegation’s visit is to expand economic cooperation and increase trade and investment between Kyrgyzstan and Afghanistan.

The statement added that during the visit, the Kyrgyz delegation will meet with officials of the Islamic Emirate of Afghanistan and participate in the Trade Communication Conference as well as bilateral meetings.

The delegation will also visit industrial facilities and various enterprises operating in Afghanistan.

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