Top Afghan Bank Denies Facing Collapse

Posted July 11th, 2011 at 7:35 pm (UTC-5)
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One of Afghanistan’s top financial institutions, Azizi Bank, has denied it is facing collapse like the corruption-ridden Kabul Bank and says its liquidity is solid.

Afghan lawmakers on Monday demanded that the acting central bank governor appear before parliament to answer questions about Azizi Bank’s current state.

The bank’s senior customer relations manager, Fraidoon Mohtasheme, told the media that speculation the bank is in trouble is baseless.

The financial stability of Azizi Bank is important because Kabul Bank, Afghanistan’s largest private lender, lost more than $900 million and nearly collapsed last year due to mismanagement, cronyism and questionable lending. The bank’s near demise plunged the country into crisis.

Several people have been arrested in connection with the Kabul Bank scandal. Last month, former Central Bank Governor Abdul Qadir Fitrat fled to the United States, saying he feared for his life following his role in investigating the scandal. Afghan authorities say he faces charges and will be prosecuted.

Kabul Bank has close ties to the Afghan leadership. President Hamid Karzai’s brother and Vice President Mohammad Qasim Fahim’s brother are both shareholders in the bank.