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New Kabul Bank’s losses continue unabated

New Kabul Bank’s losses continue unabated

Apr 14, 2014 - 19:23

KABULinfo-icon (Pajhwok): The central bank has been paying tens of thousands of dollars each month over the past three years to cover the losses of the New Kabul Bank, a lawmaker said on Monday.

The bank, once the country’s largest lender, plunged into deep crisis in 2009, when it lost $835 million in fraudulent property deals, massive off-book loans and loans to fake corporations, prompting the government to take over the bank’s affairs.

Sher Khan Farnoud, the bank's founder and chairman, and Khalilullah Ferozi, CEO of the bank, are listed among the nearly two dozen people accused of involvement in the fraud that pushed the once-biggest private lender to the brink of collapse.

The scandal, which first broke in 2010, prompted the International Monetary Fund to temporarily suspend hundreds of millions of dollars of international aid to Afghanistaninfo-icon.

Da Afghanistan Bank (central bank) chief Noorullah Dilawri last year said they had recovered $173 millions from the bank’s loanees in cash.

Dilawari was summoned to appear before the Wolesi Jirgainfo-icon or the lower house of parliament on Monday in line with a decision taken by the house committee of commissions’ heads to brief lawmakers about the existing financial problems at the New Kabul Bank.

But Speaker Abdul Rauf Ibrahimi said the central bank had informed the assembly that Dilawari had gone abroad.

“We are adjourning today’s agenda until Wednesday and wherever Dilawari is, he should arrive at the assembly on Wednesday so as we can proceed with the agenda,” he remarked.

Amir Khan Yar, who heads the house Finance and Budget Commission, told the house that he had time and again requested Dilawari to attend the panel’s meetings, but he did not.

He said the central bank faced a lot of problems and the big problem it faced was the Kabul Bank.

Without mentioning the other problems facing the central bank, the lawmaker said the central bank had failed to take crucial steps required to resolve the Kabul Bank’s crisis over the past three years.

The central bank’s committee tasked with recovering lost money of Kabul Bank had rented a house in Dubai for $100,000 against the actual rent amounting to $50,000, Yar claimed.

He said houses purchased with loan money from the Kabul Bank in Dubai had been sold at throw away prices.

The lawmaker said the Wolesi Jirga’s Finance and Budget Commission had several times requested the central bank to return the Kabul Bank to profit or privatise it again.

He said the central bank incurred tens of thousands of dollars each month to cover the Kabul Bank’s losses. He also claimed Kabul Bank staffers were paid high salaries against the law.

“Central bank’s officials have sent us a letter that says some Kabul bank officials receive salaries amounting to $2000 and some advisors are paid $3000 in monthly salary,” he said.

Yar said central bank’s chief Noorullah Dilawari suffered from healthinfo-icon problems and he could not run the bank’s affairs in a proper way.

“He (Dilawari) is in a week health status and cannot resolve these issues. I swear I have no personal problem with him and he respects me, but this man cannot take forward the central bank’s and other financial affairs,” said Yar.

Pajhwok contacted two central bank officials over Yar’s remarks, but they said they were not authorised to discuss such issues with the media. They insisted Dilawari should be asked for comments.

When contacted, New Kabul Bank chief Massoud Ghazi said he was in an important meeting and could not talk to Pajhwok at the moment.



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