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Originally posted by anglodemonicmatrix
You dont get a run on banks without a good reason or good rumour I wonder what Kabul residents are worried about.
The panic began last week when the Central Bank ousted the bank’s chairman and the chief executive officer, after discovering that the bank had lent hundreds of millions of dollars to allies of President Hamid Karzai and poured money into risky real estate investments in Dubai.
The crisis threatened to undermine confidence in Afghanistan’s fledgling financial system, which was built under American guidance after the collapse of the Taliban government in 2001. Among the clients of the bank is the government, which pays the salaries of about 250,000 public employees through the bank, including those of security officials and the military.
The bank, whose major shareholders include a brother of Mr. Karzai and a brother of the first vice president, helped finance the president’s election campaign last year and lent luxury apartments in Dubai rent-free to well-placed officials. Those connections helped shield the bank from scrutiny, officials said.
Originally posted by boondock-saint
already posted
www.abovetopsecret.com...
Afghans continued pulling money from their country's largest bank Saturday, despite assurances from top officials that the lender, which has deep ties to the administration of President Hamid Karzai, was financially secure.
Hours after dozens of branches of Kabul Bank closed following the first business day since the Islamic weekend, there was no word from Afghanistan's central bank or the lender's management on how much money had been withdrawn Saturday.
...
It isn't clear if Kabul Bank's assets—mostly loans and property—are easily recoverable. If the pace of withdrawals hasn't slowed, the bank could run out of cash in the next few days, despite its relatively large cash reserves.
U.S. officials fear that even the hint of failure at Kabul Bank, the largest of Afghanistan's 10 private banks, could prove dangerously destabilizing. More than a quarter of a million soldiers, police and teachers are paid their salaries through the bank, and the Afghan government keeps many of its accounts there.
U.S. officials fear that even the hint of failure at Kabul Bank, the largest of Afghanistan's 10 private banks, could prove dangerously destabilizing. More than a quarter of a million soldiers, police and teachers are paid their salaries through the bank, and the Afghan government keeps many of its accounts there.
Originally posted by leo123
This to me is the key - they would all revolt if the bank went down and they couldn't access their wages.
Originally posted by leo123
A small team of advisers from the United States Treasury Department was in Kabul providing technical assistance