View Full Version : Troubled Afghan bank faces further day of queues

09-05-2010, 10:53 AM
Troubled Afghan bank faces further day of queues
By Usman Sharifi (AFP) 5 hours ago
KABUL Queues formed at branches of Afghanistan's biggest bank on Sunday as customers clamoured to withdraw their savings, though lines were shorter days after corruption allegations appeared in US newspapers.
Security appeared to have been stepped up at the head office of Kabul Bank, with armoured vehicles parked outside as crowds thronged the banking chamber.
Many customers said they wished to withdraw their money because they had lost trust in the bank, though others said they simply needed cash ahead of this week's Eid holiday marking the end of the Muslim Ramadan fasting month.
Waheed Shirzoi, 26, said: "I am withdrawing my money because I am taking a trip and I also believe my money will not be safe in this bank.
"I think my money will be safer in the state-run banks," he said.
Privately-owned Kabul Bank has been the subject of reports alleging large-scale corruption by executives, though the government and central bank have said it is solvent and there is no need for customers to panic.
Banks were closed on Friday for the weekly holiday, providing respite after a day of mild panic following the reports, which saw the Washington Post say Kabul Bank had been taken over by the central bank.
The governor of Afghanistan's central bank, Adbul Qadir Fitrat, said Kabul Bank had not been taken over and along with the finance minister reassured depositors their money was secure.
On Saturday, branches across the country saw huge crowds wanting to withdraw their money, though many were also queuing to be paid, as Kabul Bank handles the salaries of hundreds of thousands of civil servants.
US newspapers, including the New York Times and the Wall Street Journal, reported on Wednesday that the central bank had replaced the bank's two top executives -- chief executive Khalilullah Ferozi and chairman Sher Khan Farnud -- and ordered Farnud to hand over 160 million dollars' worth of luxury property purchased in Dubai for himself and for cronies.
Fitrat denied the reports, saying the men had resigned voluntarily as new regulations did not permit shareholders to hold executive positions.
The US Treasury Department on Saturday denied a report, also in the Washington Post, that American taxpayers would be forced to help bail out Kabul Bank.
The White House said the report was not true and pointed to a statement from Deputy Treasury Secretary Neal Wolin saying the bank's troubles were "an Afghan issue".
"While we are providing technical assistance to the Afghan government, no American taxpayer funds will be used to support Kabul Bank," Wolin said.
The Washington Post said on Friday the US Treasury Department had dispatched a team to Kabul to help deal with the crisis, and that a brother of Afghan President Hamid Karzai had called for Washington's intervention.
One of Karzai's political rivals Sunday questioned the Afghan government's conduct in dealing with the banking crisis, saying it had a responsibility to help ordinary Afghans and not just the president's family.
"You are the president of a country and your prime responsibility is to help your own family?" said Abdullah Abdullah, who was Karzai's main rival in last year's presidential elections.
"The money belongs to the people of Afghanistan, it's not anybody's private entity," he told reporters at his home in Kabul.
"If there was a misconduct, as it seems there was by the bank itself, what was the regulatory role, the supervisory role of the government of Afghanistan and the central bank? Why it wasn't dealt with earlier?"
Copyright 2010 AFP. All rights reserved. More

09-05-2010, 11:52 AM
Kabul Bank is a modern and fancy bank. Many other banks can hardly compete with them. The minute these news die out, the money will return.

Yeah your right this entire fiasco was the result of Kabul bank Executives losing favor with Karzai..he sensationalized false news to evoke mass panic and thereby jeopardized the integrity of the bank