UN warns of 'colossal' collapse of Afghan banking system, seeks solution

Finding a way to avert a collapse is complicated by international and unilateral sanctions on Taliban leaders.

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 Taliban seized power on Aug. 15 from Afghanistan's Western-backed government has sent the economy into freefall, putting a