Afghan Bank May Open Branch in Chabahar FTZ

EghtesadOnline: An Afghan bank may open a branch in Iran's Chabahar Free Trade Zone, Energy Minister Reza Ardakanian said, without mentioning the name.

News ID: ۷۵۰۲۹۵

23 June 2020

"Afghanistan is exempt from sanctions…[therefore] Afghan banks are allowed to operate in Chabahar," Ardakanian was quoted as saying by IRNA on the sidelines of a meeting Monday with Mohammad Hanif Atmar Afghanistan's acting foreign minister in Tehran.

"Opening bank branches in Chabahar can pave the way for closer ties between the two neighbors," he said.

Back in 2018 the US government exempted Iran's Indian-backed port of Chabahar from new sanctions, recognizing the value of the project to economic growth of Afghanistan.

It was announced earlier that three banks from Afghanistan have applied for permits to open branches in Chabahar FTZ. Ghazanfar Bank, one of the three, was reportedly taking the final steps to open in the strategic port.

Afghanistan is one of Iran’s major trading partners in the region with exports to that country close to $2 billion. However, lack of normal banking channels has created major hurdles to developing bilateral trade.

Hussein Salimi, head of Iran-Afghanistan Chamber of Commerce says opening a bank branch can help resolve many financial problems importers and exporters face on both sides.

Iran exported $2.3 billion worth of goods to Afghanistan in March 2019-20 topping the list of world exporters to the neighboring country. The country is Iran's fifth export destination.

Chabahar has two ports: Shahid Kalantari and Shahid Beheshti. Opening of first phase of Shahid Beheshti Port (out of five phases defined for the project), which has tripled its capacity to 8.5 million tons (equal to all northern ports), will allow the docking of super-large container ships.

Chabahar is considered a gateway to golden opportunities for trade by India, Iran and Afghanistan with Central Asian countries, besides ramping up three-way commerce in the wake of Pakistan denying transit access to India.

Iran offers 80% discount in export tariffs and 75% discount on import duties to Afghan traders using Chabahar.

Afghan traders can also benefit from warehouse facilities in the strategic Iranian port, which is India's primary gateway to landlocked Afghanistan by circumventing Pakistan.