Afghan bank: Crisis, what crisis?
Kabul, Afghanistan (CNN) — Afghanistan’s acting central bank governor says the country’s second largest private lender is not in crisis, warning outspoken lawmakers — who claim the bank is in trouble — against spreading fear among its account holders.
“Azizi Bank was neither facing any crisis before, (and) is not facing (a crisis) now.” Mohebullah Safi told CNN. “Many Afghans have accounts… and we shouldn’t panic the people, which could affect our national interest.”
Safi, who addressed parliament earlier this week at the request of lawmakers, said the central bank is investigating investment problems with Azizi Bank, but noted that its $588 million in reserves are safe.
He added that officials are working to change the country’s banking laws to better monitor investments made by Afghan banks and their partners both domestically and abroad.
But Afghan parliament member Haji Zaher Qader claimed share holders tried bribe him to keep quiet over the bank’s lending practices.
“They offered me a million dollars that I keep silent and not to talk about (the) Azizi Bank crisis, but I refused their offer,” he told CNN.
Qader would not elaborate as to who offered him the alleged bribe or provide specifics about banking practices that are a cause of concern.
Still, lawmakers have called for a forensic audit of the bank’s finances in an effort to prevent a similar scandal to last year’s massive fraud at the country’s largest private lender, Kabul Bank.
More than $900 million in loans went missing from Kabul Bank, many of them interest-free and made without proper documentation, no collateral or repayment plans.
The recipients allegedly used the loans to finance lavish lifestyles outside Afghanistan, triggering a crisis that threatened a collapse of the entire Afghan financial system. It also exposed widespread corruption throughout the Afghan banking sector.
Kabul Bank handled salary payments for thousands of Afghan soldiers, police and public workers and was reported to have held up to $1 billion in deposits belonging to Afghan citizens.
CNN’s Fazel Reshad contributed to this report




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Article source: http://edition.cnn.com/2011/WORLD/asiapcf/07/17/afghanistan.bank.crisis/index.html?eref=edition