Top finance officials in Afghanistan are trying to reassure depositors that their money is safe. This comes after reports that the nation’s biggest bank was in trouble.
Last week, Kabul Bank’s chairman and chief executive quit to comply with new rules that shareholders in a bank could not hold those positions. However, the Washington Post newspaper reported that the bank was in financial trouble due to millions of dollars in unrecorded loans made to allies of President Hamid Karzai, including the president’s brother. The newspaper reported the money was used to buy villas in Dubai.
Government officials denied that report.
Nevertheless, Kabul Bank customers began to withdraw their money.
Some 300 people began queuing up at 3 Monday morning to withdraw money from the central office of the bank in Kabul. There, they were met by security officers carrying Kalashnikov rifles. When the bank opened, they were permitted to enter when their number was called.
One of those waiting to enter the bank said “For now, I want to withdraw my money. If the bank is able to create confidence, for sure I will put my money back in Kabul Bank. I don’t want to close my account.”
Later Monday, top financial officials stressed that the bank was out of danger. Their words echoed the comments made last week by Afghanistan’s Finance Minister Omar Zakhilwal, who said "Their money is safe. The government of the Afghanistan Bank is standing behind Kabul Bank. We know the money is there, they must not panic. If they need their money on a regular basis they can withdraw it. But to panic and say their money will be lost, I guarantee to them it will not be."
Abdul Quadeer Fitrat, the director of Afghanistan’s Central Bank said if needed, the central bank was prepared to shore up Kabul Bank.
However, Kabul Bank had not made such a request, he said.