KABUL — Afghan officials plan to sell part of troubled Kabul Bank, the country’s biggest financial institution, in hopes of clearing the way for the resumption of international aid, which was temporarily suspended last year in the wake of the bank’s loan scandal.
The head of the country’s central bank announced Wednesday that his institution had placed Kabul Bank in receivership and plans to have a government commission collect on its problem loans, then privatize what’s left of the bank within three months.
“All those who violated law and committed fraud in Kabul Bank, whether they are shareholders or employees, will be prosecuted strictly,” said Abdul Qadir Fitrat, head of the central bank, which took over day-to-day operations of Kabul Bank after the scandal. “A high-level commission has been established and has been empowered to collect the loans. If somebody doesn’t cooperate, we will take action. We will seize their property.”
Kabul Bank was the flagship of Afghanistan’s 17 commercial banks, responsible for processing the salaries of the nation’s 300,000 public employees.
In September, thousands rushed to withdraw their money from the bank as news spread that the institution had lost hundreds of millions of dollars that its owners, many of them members of President Hamid Karzai’s inner circle, had borrowed.
The International Monetary Fund suspended support for Afghanistan because of the scandal, effectively preventing the country from receiving about $70 million from foreign donors, and recommended the bank be placed in receivership or sold.
