Exclusive-U.N. warns of 'colossal' collapse of Afghan banking system

FILE PHOTO: Afghan money exchange dealers wait for customers at a money exchange market, following banks and markets reopening after the Taliban took over in Kabul, Afghanistan, September 4, 2021. REUTERS/Stringer/File Photo

UNITED NATIONS (Reuters) - 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."