Afghan bankers

It appears that Afghan banking has nothing to learn from our own sharks, but the consequences could be much worse for them.

Kabul Bank losses spark fears of huge Afghan corruption and financial crisis - Telegraph

Investigators at Kabul Bank have found the institution allegedly made vast loans to its own shareholders and fear much of the money is lost or untraceable, according to reports.

The scale of the potential losses at what was once the showpiece of the country's banking sector will further shake the confidence of international donors weary of alleged corruption in Afghanistan.

Of nearly £650 million lent by Kabul Bank, four-fifths went to a colourful circle of shareholders which includes Mahmoud Karzai, brother of the president, and also a brother of the vice president. The chairman, Sher Khan Farnood, is a world-class poker player.

Money went on questionable business projects, cash donations to political figures and luxurious Dubai property including twelve villas on the Palm Jumeirah development. Most shareholders used loans from the bank to purchase their shares.

Several have agreed to limited repayment schemes, but Afghan authorities may have difficulties facing difficulties recouping the money or seizing assets.

Millions have been lost in Dubai's property slump and many of the loans were apparently made to front men who have left the real beneficiaries a mystery.

"The amount of recovery at this stage is very uncertain," one Western official told the Washington Post.

"Unless you take legal action and you seize their assets, which needs to happen fast, you're not going to recover their assets."

Kabul Bank is the country's most popular bank and holds the accounts of hundreds of thousands of small savers. Payrolls for the army, police and many civil servants are paid through the institution.

Afghanistan's central bank sought has played down the potential scale of the alleged losses.

Abdul Qadir Fitrat, governor, said Kabul Bank was committed to collecting £350 million of loans and auditors had been able to account for all but £65 million of the money lent.

He denied the reports of a larger loss and said the bank had £200 million in cash.


Book Reviewer
In the days before the Russian invasion there was a thriving money bazaar in Kabul, where you could exchange just about every currency on the planet, at amazingly good rates , unfortunately it was almost all counterfeit, but it was a fun place to hang out

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