Afghan Banking Benefits Afghan Soldiers

One of the most serious problems with the Iraqi military and police has been the issue of pay, and how it is handled. Due to a lack of banks, most of the Iraqi security forces are paid in cash. Soldiers and police must often then take a leave to go home and give their pay to their family. Some choose not to return. In other cases, money is extorted from the soldiers and police by superiors or community and tribal leaders.

Afghanistan used to have the same problem. That has changed and for the better in the last several years. Col. Curt Alan Rauhut, the NATO Financial Controller Deputy CJ8 for the NATO Training Mission Afghanistan Combined Security Transition Command Afghanistan, spoke to bloggers recently and talked about the banking situation in Afghanistan and how pay is distributed to the hundreds of thousands of soldiers and police.

Rauhut described a vibrant banking system in Afghanistan. The government operates a central bank, similar to the Federal Reserve in the United States, and there are many private banks with banking available in nearly all 34 provinces. The Colonel named several, Kabul Bank, Azizi Bank and Afghanistan International Bank. The Afghanistan Banks Association lists 17 banks on its website.

To reduce the opportunity for skimming and extortion, the NATO Training Mission worked with the Afghans and created one of the most novel payroll disbursement systems in the world. 99% of the members of the military and 77% of those in the police are paid by electronic funds transfer into their bank account.

For those policemen without banking access, a unique arrangement has been made with Roshan, the leading cellular telephone provider in Afghanistan. Col. Rauhut called it "pay by phone". Many Americans know this phrase as it relates to arranging bill payment by phone. In Afghanistan, for some members of the police, it means that they get paid using their cell phone.

A text message is sent to the policeman with information on the pay. The policeman goes to a Roshan cell phone store and the manager uses a code to verify the information, and then gives the policeman his pay in cash. The manager then clears the account. Roshan has over 3 million Afghan subscribers, according to their website.

Afghanistan has a lot of very remote outposts for police and military. In the remotest of locations, payroll is still disbursed in cash.

The robust Afghan banking system and the inventiveness of the NATO Training Mission and its Afghan partners have provided solutions that ensure that the average soldier or policeman receives his pay and gets to keep it. That step alone places them ahead of most other countries in the region, and most poor countries worldwide.