Kabul Bank In Afghanistan Crowded As Clients Withdraw Deposits
The troubled Kabul Bank in the capital of Afghanistan is having to deal with anxious customers demanding their deposits today.
This comes after the bank made headlines when it declared that it was firing top executives because of dramatic loss of money due to unrecorded loans to allies of President Hamid Karzai.
Reports have the Kabul Banks losses in the millions of dollars. The customers were gathered outside of the bank’s huge headquarters in the Shahr-e-Nau district of the capital.
One of the people outside of the bank was willing to speak with a reporter. “I was shocked to hear the news about the bank,” an unidentified client, who owns a construction company. “I have $15,000 deposited and now they are telling me they are out of money, and I was able to take only $1,000.”
The bank’s chairman and chief executive quit last week to comply with rules against shareholders holding those positions, the central bank governor said yesterday.
He denied a Washington Post report that Kabul Bank is in trouble because of millions of dollars in unrecorded loans to allies of President Hamid Karzai and after it spent more than $160 million on Dubai villas, including for Karzai’s brother Mahmoud.
The Finance Ministry on Thursday has issued a statement that assures government employees that they would continue to be able to deposit and withdraw their salaries at Kabul Bank.
The statement also added that the replacement of top executives would improve management and services and was part of the life cycle of a business.
At his news conference, Fitrat refused to address the allegations and tried to dissuade customers from withdrawing their money.
He said the top two executives of Kabul Bank had resigned as part of reforms being implemented by the central bank to improve professionalism at some of Afghanistan’s 10 private banks.
At a press conference Wednesday, Fitrat said the resignations of Farnood and Fruzi had been instigated by the bank to conform with new rules banning shareholders from holding senior operating positions.
“Reforms will follow in other banks should their shareholders continue holding CEO positions,” he told journalists. “The Kabul Bank took the initiative and decided voluntarily to reform their leadership and took Mr. Massoud Ghazi as their CEO.
The appointment of Masoud Ghazi has been an initiative by the Kabul Bank.”
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