Afghans Crowd Scandal-Hit Kabul Bank

(NewsCore) - Branches of Afghanistan's biggest private bank were crowded Saturday morning with government employees queuing to be paid and customers who wanted to withdraw their money following corruption allegations.

Earlier this week, Kabul Bank was the subject of U.S. newspaper reports alleging there was large-scale corruption by the bank's executives. However, the government and central bank said it was solvent and added there was no need for customers to panic.

Banks were closed Friday for the regular weekly holiday, which provided respite after a day of mild panic that followed the reports. They included an article in The Washington Post that said the central bank had taken over the bank.

The governor of Afghanistan's central bank, Adbul Qadir Fitrat, said the bank had not been taken over, and, along with the finance minister, reassured depositors that their money was safe.

The Wall Street Journal reported Wednesday that the central bank had replaced Kabul Bank's two top executives -- Chief Executive Khalilullah Ferozi and Chairman Sher Khan Farnud -- and ordered Farnud to hand over $160 million worth of luxury property purchased in Dubai for himself and others.

However, Fitrat denied the reports, saying the men resigned voluntarily as new banking regulations no longer permitted shareholders to hold executive positions.

Finance Minister Hazrat Omar Zakhailwal reassured Kabul Bank customers that the institution was solvent, saying the administration of Afghan President Hamid Karzai had given its full backing and money was being delivered to branches nationwide. He added that $100 million was deposited in the bank to cover government salaries, which were due to be paid Saturday.

Many people crowding into Kabul Bank branches in Kabul and the northern commercial city of Mazar-I-Sharif on Saturday wished to withdraw money ahead of the upcoming Eid holiday, when Muslims buy gifts, new clothes and special foods to celebrate the end of the month-long Ramadan fast.

Gul Mohammad, a customer, said outside the head office he wanted to close his account, and planned to withdraw his $5,000. "I heard the government say the problems will be solved but I am still suspicious," he told AFP.

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