This has been a while coming… Afghanistan has just got a new independent report published into what has previously been described as a Ponzi scheme operated at Kabul Bank, the country’s biggest lender.
It’s grim, grubby stuff, detailing how the men at Kabul Bank and their friends and relatives got rich off $861m in bogus loans and sparked a bank run in 2010, while political interference has since hampered the clean-up of the mess. Read more
Writing the day before the second anniversary of Lehman Brothers’ fall, Gideon Rachman argues that ’9/15′ might matter more to America in the long run than 9/11.
While you can argue with that, there is now another parallel of sorts between the two dates, thanks to the Afghan central bank. Read more
Afghanistan’s financial institutions have stepped in to stop a run on Kabul Bank, the country’s largest private lender, as customers withdrew about 60% of the bank’s cash deposits after its two top executives resigned amid corruption allegations, the FT reports. News emerged last week that the central bank had taken control of Kabul Bank, forcing its senior two managers to resign. Bloomberg quotes Afghanistan’s central bank governor saying on Monday that Kabul Bank was “out of danger” and has enough liquid assets. Read more
Afghanistan’s financial institutions have stepped in to stop a run on Kabul Bank, the country’s largest lender, as customers withdrew about 60 per cent of the bank’s cash deposits after its two top executives resigned amid corruption allegations, the FT reports. Mahmoud Karzai, a shareholder of Kabul Bank and brother of Afghan president Hamid Karzai, told the Financial Times that “the government has stepped in to reassure people”. The Washington Post reported last week that the central bank had taken control of Kabul Bank, forcing its senior two managers to resign. Mahmoud Karzai, speaking from Dubai, said the situation at the ailing bank was improving. “Withdrawals have now almost stopped,” he said. “Almost $300m has been withdrawn, and [the bank] had about $500m in cash before, so they still have about $200m.” Read more
Afghanistan’s government on Sunday inched closer to bailing out the country’s largest bank, setting aside hundreds of millions of dollars that could be used to keep Kabul Bank solvent, reports the WSJ, citing Afghan officials. The move came as depositors continued to pull their money from the lender, mobbing branches in Kabul and other parts of the country. Reuters adds that an opposition leader on Sunday urged Afghanistan’s government and central bank to give clear answers on Kabul Bank after its top two directors resigned. Read more