Bank Alfalah Exits Afghanistan After 20 Years, Sells Kabul and Herat Branches to Ghazanfar Bank
By Bilal Ahmed | Updated: 7 November 2026 Bank Alfalah Limited has formally exited Afghanistan after more than two decades, completing the sale and transfer of its banking operations in the country to Ghazanfar Bank on 5 November 2026. The deal covers the banking business of the bank’s Kabul and Herat branches, along with their…
Bank Alfalah Limited has formally exited Afghanistan after more than two decades, completing the sale and transfer of its banking operations in the country to Ghazanfar Bank on 5 November 2026. The deal covers the banking business of the bank’s Kabul and Herat branches, along with their related assets and liabilities, and brings Bank Alfalah’s presence in Afghanistan — which began in 2005 — to a close.
The bank disclosed the completion of the transaction in a material-information notice to the Pakistan Stock Exchange (PSX) on Friday, 6 November 2026, a day after the transfer was completed. With the sale done, Bank Alfalah has ceased banking operations in Afghanistan and will now complete the closure of its branches there in line with the applicable regulatory requirements.
| Key fact | Detail |
|---|---|
| Bank exiting | Bank Alfalah Limited (BAFL) |
| Buyer | Ghazanfar Bank (Afghanistan) |
| Transaction completed | 5 November 2026 |
| Announced (PSX notice) | Friday, 6 November 2026 |
| Branches transferred | Kabul and Herat — banking business, related assets and liabilities |
| Regulatory approvals | State Bank of Pakistan and Da Afghanistan Bank |
| Presence in Afghanistan | 2005–2026 — more than 20 years |
| Sale price | Not disclosed |
| Customer accounts | Transferred to Ghazanfar Bank or closed by customers |
What exactly has Bank Alfalah sold?
The transaction is not a sale of a subsidiary or a shareholding. It is a transfer of the banking business itself: everything tied to Bank Alfalah’s Kabul and Herat branches — the customer accounts, the loans and deposits, and the related assets and liabilities — has moved to Ghazanfar Bank. That is why the deal needed the approval of the central banks on both sides of the border, and why it took almost a year to complete after the first offer arrived.
According to the bank’s PSX notice, the definitive transaction documents were signed, all conditions precedent were satisfied, and the transfer was completed on 5 November 2026. The notice also confirmed that both regulators — the State Bank of Pakistan and Da Afghanistan Bank — had given their approvals before the deal closed.
For customers, the changeover had already begun before the completion date. By 2 November, account holders at the Kabul and Herat branches had been told to either move their balances to Ghazanfar Bank or withdraw their funds and close their accounts. In practice, that meant the transfer was largely an administrative handover by the time the formal completion was announced.
A presence that began in 2005
Bank Alfalah entered Afghanistan in 2005, opening its first branch in Kabul and later expanding to Herat. It was an early mover among Pakistani banks: at the time, Afghanistan’s banking sector was being rebuilt from almost nothing, and a Pakistani bank with experience in both conventional and Islamic banking had an obvious opening.
Over the years that followed, the two branches served a mix of customers — Afghan businesses trading with Pakistan, remittance recipients, and companies working on reconstruction and aid projects. The bank offered both conventional and Islamic banking products, a combination that suited a market where Shariah-compliant finance carries real weight with customers.
Twenty years is a long time in Afghan banking. The country has seen a change of government, the withdrawal of foreign forces, a frozen central-bank reserve position, and a banking system that has had to adapt to sanctions-era restrictions on international payments. Through all of that, Bank Alfalah kept its two branches running. The decision to exit now, through a negotiated sale rather than a sudden closure, is a managed withdrawal — the kind of orderly handover regulators on both sides prefer, because it protects depositors.
How the deal unfolded: a year-long process
The exit did not happen overnight. The timeline, as disclosed by the bank and reported in the Pakistani press, shows a careful, step-by-step process:
- December 2025: Bank Alfalah’s board accepted a non-binding acquisition offer from Ghazanfar Bank for the Afghanistan operations.
- January 2026: The State Bank of Pakistan and Da Afghanistan Bank gave in-principle approval for due diligence to begin, allowing Ghazanfar Bank to examine the books of the Kabul and Herat branches.
- By 2 November 2026: Customers were informed that they should transfer their balances to Ghazanfar Bank or withdraw their funds and close their accounts.
- 5 November 2026: The sale and transfer was completed, with all conditions precedent satisfied and definitive documents signed.
- 6 November 2026: Bank Alfalah informed the Pakistan Stock Exchange through a formal material-information notice.
That sequence matters for one reason: it shows this was a regulatory process, not a reaction to a single event. In-principle approval for due diligence in January, a ten-month gap for examination and documentation, and a customer notice before completion are all the marks of a transaction that both central banks watched closely.
What it means for customers in Kabul and Herat
For account holders, the practical effect is straightforward. Their banking relationship now sits with Ghazanfar Bank, which has taken over the business of the two branches. Customers who chose to move their balances did so ahead of completion; those who preferred to withdraw were able to close their accounts before the transfer.
The PSX notice says Bank Alfalah will complete the closure of its Afghanistan branches in accordance with applicable regulatory requirements. Branch closure in a foreign jurisdiction is itself a regulated process — licences must be surrendered, remaining obligations settled, and the central bank’s sign-off obtained — so the physical winding-down of the branches will take some time even though the business transfer is complete.
Why banks exit cross-border markets
Banks leave foreign markets for many reasons, and it is worth separating the general picture from this specific deal. Running a small branch network in another country carries costs that a domestic operation does not: a separate regulatory regime, correspondent-banking relationships that must be maintained, compliance and anti-money-laundering obligations in two jurisdictions, and capital that has to be set aside for a business far from head office.
For a bank the size of Bank Alfalah, two branches in Afghanistan were always a small part of the whole. Cross-border operations also face a hard commercial question: does the business earn enough to justify the compliance and capital it consumes? When the answer turns negative — or when the bank decides its capital works harder at home — an orderly sale to a local buyer is the standard answer. Ghazanfar Bank, as an Afghan institution, takes over a ready-made branch business with existing customers, while Bank Alfalah frees up management attention and capital for its home market.
It is also worth noting what this exit is not. No sale price was disclosed, so any figure attached to the deal would be speculation. And the exit is a business and regulatory decision, disclosed through the stock exchange with both central banks’ approvals — not a political statement. The tone of the bank’s own notice is dry and procedural, as such filings always are: approvals obtained, documents signed, conditions satisfied, transfer complete.
The wider picture for Pakistan’s banks and economy
Bank Alfalah’s exit comes at a time when Pakistan’s own financial picture is moving. The State Bank’s reserves position and the country’s external account are closely watched by the same investors who read PSX notices, and the central bank has been working with the banking sector on modernising the country’s core financial infrastructure. Pakistan’s foreign exchange reserves recently touched a record level, a development covered in our report on Pakistan’s foreign exchange reserves reaching a record $26.86 billion in November 2026.
On the technology side, the State Bank has also been pushing banks towards stronger, more modern systems, including a recent initiative with Cisco to upgrade the country’s core banking network — work that matters for every bank operating in Pakistan, including Bank Alfalah. You can read more in our coverage of the SBP–Cisco core banking network upgrade for Pakistan.
The trade relationship with Afghanistan also remains part of the story. Pakistan’s external trade position shapes how much cross-border banking business exists to be done in the first place, and the country’s trade deficit figures give the context for that. Our report on Pakistan’s trade deficit widened to $3.88 billion in October 2026 sets out the latest numbers.
What happens next
Three things remain to be done. First, the physical closure of the Kabul and Herat branches, which Bank Alfalah says it will complete under the applicable regulatory requirements. Second, the integration of the transferred business into Ghazanfar Bank, which now serves the customers who moved across. Third, any further disclosure — if Bank Alfalah reports a financial impact from the sale in its next quarterly results, that will be the first public indication of what the deal was worth, since no price has been disclosed so far.
For now, the facts are simple and complete: a Pakistani bank that arrived in Kabul in 2005 has sold its Afghanistan business to an Afghan bank, with the approval of both countries’ central banks, and has closed a twenty-year chapter in an orderly way. In a region where banking exits are often messy, that orderliness is the real story.
Frequently Asked Questions
When did Bank Alfalah exit Afghanistan?
Bank Alfalah completed the sale and transfer of its Afghanistan banking operations to Ghazanfar Bank on 5 November 2026, and announced it through a Pakistan Stock Exchange notice on Friday, 6 November 2026.
Which Bank Alfalah branches in Afghanistan were sold?
The deal covers the banking business of Bank Alfalah’s Kabul and Herat branches, together with their related assets and liabilities. These were the bank’s two branches in Afghanistan.
Who bought Bank Alfalah’s Afghanistan operations?
Ghazanfar Bank, an Afghan bank. Its board-level offer was accepted by Bank Alfalah in December 2025, and the transaction completed in November 2026 after regulatory approvals and due diligence.
How long was Bank Alfalah in Afghanistan?
More than 20 years. Bank Alfalah entered Afghanistan in 2005, opening its first branch in Kabul and later expanding to Herat, offering both conventional and Islamic banking.
Was a sale price disclosed?
No. Neither Bank Alfalah’s PSX notice nor the press reports of the deal disclosed a sale price, so no figure should be attached to the transaction unless the bank reports one in a future financial filing.
Which regulators approved the deal?
Both the State Bank of Pakistan and Da Afghanistan Bank approved the transaction. The central banks gave in-principle approval for due diligence in January 2026, before the definitive documents were signed and the transfer completed.
What happens to Bank Alfalah customers in Afghanistan?
Customers were told by 2 November 2026 to transfer their balances to Ghazanfar Bank or withdraw their funds and close their accounts. The transferred banking business now sits with Ghazanfar Bank, and Bank Alfalah will complete the closure of its Afghanistan branches under the applicable regulatory requirements.
