Thu, Oct

Kabul Bank scandal hurt banking system: Ghani


president-Ghani-4President Ashraf Ghani on Monday said the Kabul Bank scandal would always be condemned in Afghanistan history for damaging the country’s banking system.

While introducing the new Da Afghanistan Bank (DAB) head Khalil Sediq, the president said Afghanistan had a bright banking history and Abdul Majid Zabuli was the founder of Afghanistan banking system in the 20th century.

He said Afghanistan had made big business deals with European, Asian and American banks under Zabuli leadership.

The Afghanistan banking system had been unique in terms of transparency, understanding and economic improvement, but the Kabul Bank case damaged the system, the president added.

The Kabul Bank scandal would always remain a dark spot, he said, adding that the banking system should improve the country’s economy and provide loans to investors and should not be used to loot people and the government.

However, Ghani said the Kabul Bank case was approaching a solution and the money lost being recovered.

Kabul Bank, once the country’s largest private-sector lender, plunged into deep financial crisis due to unauthorised loans and other anomalies.

Reports put at 937.7 million the loans issued to a number of people, including stakeholders.

The government says it has so far recovered $437 millions. Twenty-four defaulters have paid back their debts until now.

President Ghani said he was sure the banking system would be effectively managed under Khalil Sediq.

He said banking was one of important and vital institutes to develop the country’s economic situation. A country without an active banking system could not be trusted and cannot improve its economy, he said.

“I want to make it clear that the Afghanistan Central Bank is paid a high attention, the new ADB chief would be independent to integrate Afghanistan monetary policy and improve the banking system at a level where our traders can openly make deals and enable Afghanistan to stand on its own feet,” Ghani added.

Khalil Sediq thanked the government for trusting him and said the banking system in Afghanistan faced many challenges and needed attention and wise steps to restore it.

He also said non-implementation of law, a weak management and leadership were the reasons that led the Kabul Bank into crisis.

“I hope we would resolve the Kabul Bank issue and new measures would be taken soon to have a strong and trustable banking system,” Sediqi said.