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29 March 2024

Expats concerned over Kabul Bank crisis

Published
By VM Sathish

The Afghan business community and expatriates in the UAE are concerned about their deposits in Kabul Bank, a private bank that is currently facing a run on deposits following reports that its assets far exceed liabilities and senior managers were forced to resign.

Most of the bank’s senior managers and shareholders have business relationship in Dubai and efforts are on to save the bank with more funds from the Afghanistan Central Bank.
 
An Afghanistan trader in Dubai said: “We are all worried about our deposits in Kabul Bank. There are many Afghanistan businessmen and traders in Dubai who have regular transactions with Kabul Bank. We hope the Central Bank will resolve the problem and we will be able to get back our deposits,” said the businessman, preferring anonymity.
 
He said many Afghanistan expatriates in the UAE also send their savings to the bank. Some of the major shareholders and managers of Kabul Bank are also in Dubai, trying to resuscitate the bank, which has seen more than $150 million withdrawal in the past couple of months.
 
Most of the major shareholders and senior managers resigned from the bank and are currently in Dubai, sources in Afghanistan Business Council revealed to Emirates 24|7. Some of them have lost money invested in property and other businesses.
 
Many of the less than 200 members of the Afghanistan Business Council in the UAE have regular dealings with Kabul Bank, sources said.
Reports said that Afghan government employees, including teachers, soldiers and policemen, were lining up outside Kabul Banch’s branches throughout the country to demand their money.
 
Afghanistan’s Finance Ministry issued a statement Thursday declaring the bank was “reliable” and that deposits would be guaranteed. The Afghanistan president’s family business, which includes major companies like the Alokozay group, has a major share in Kabul Bank.
 
An Afghani owned food company in Dubai said they do export to Afghanistan but the crisis in Kabul Bank has not affected any of its regular transactions. Kabul Bank, which opened in 2004, has 68 branch offices spread over all 34 provinces in Afghanistan. It handles the pay for Afghan teachers, soldiers and police.
 
Sherkhan Farnood, former chairman of Kabul Bank, and Khalilullah Ferozi, former chief executive officer, voluntarily resigned because, under new reforms, only banking professionals can hold the top operating positions at banks.
 
The bank is being run by Masood Ghazi, a former official at the central bank. Afghanistan Central Bank is keen to bail out the troubled bank so that the crisis does not spread to other banks or financial institutions. "We export food and beverages to Afghanistan. The crisis facing Kabul Bank has not affected any of our transactions," said another Afghanistan trader.