Lonq queues at Afghan bank amid corruption claims

Afghan men wait to withdraw money from the Kabul Bank in Kabul yesterday

An owner of Kabul Bank, Afghanistan’s biggest bank, said yesterday branches were being supplied with cash to meet depositors’ needs as queues formed a day after US media allegations of corruption.
“We have no problem, inshallah [God willing],” Khalilullah Ferozi, Kabul Bank’s former chief executive officer, told AFP.
“Kabul Bank is well prepared to meet the demands of depositors who want to withdraw their money. We had some cash problems in the branches but we have supplied enough,” he said.
“The problem with cash supply arose because we had supplied the branches according to normal circumstances.”
Ferozi spoke as long queues formed at branches of Kabul Bank in cities across Afghanistan, a day after authorities denied allegations of corruption at the bank.
Major US newspapers said the central bank had replaced the bank’s two top executives – Ferozi and chairman Sher Khan Farnud – and ordered Farnud to hand over 160 million dollars’ worth of luxury property purchased in Dubai for himself and for cronies.
However, central bank chief Abdul Qadir Fitrat said on Wednesday that the pair had not been forced from office but had resigned after the introduction of new rules forbidding shareholders from holding senior positions.
“The central bank, the government of Afghanistan, is standing behind Kabul Bank and will never allow it to collapse,” Fitrat told a news conference.
“Kabul Bank has no liquidity problems. Right now the Kabul Bank is functioning all over the country. Kabul Bank will never have liquidity problems in the future, inshallah,” he said.
Ferozi said yesterday that anxious customers had withdrawn 80 million dollars on Wednesday. By midday (0730 GMT) yesterday, customers had withdrawn 12 million dollars and deposited around four million dollars, he said.
“There’s not a run. We’re here and we are prepared to pay out as much as the depositors want to withdraw from their accounts,” he said.
“Of course we had problems but we’re absolutely fine now,” he said.
His comments appeared designed to head off a potential run on branches of Kabul Bank in major cities, including Kabul, were hundreds of people gathered in the main banking chamber of the head office by midday in the hope of withdrawing their funds.
Long queues also formed at branches in the commercial city of Mazar-i-Sharif, in the north, in Herat in the east, and the southern city of Kandahar, AFP correspondents said.
While some demand for cash could be attributed to the upcoming Eid holiday, which begins on September 10 following the fasting month of Ramadan, many of the people queuing said they were concerned about the bank’s solvency.
As the ticket machine for those queuing up at the bank’s head office in Kabul issued its 900th ticket, a 23-year-old man who asked not to be named said: “I want all my money. I want to withdraw all my money.”
Asked why he want to withdraw his funds after authorities had guaranteed deposits, he said: “I don’t trust them. I’m sure it has problems.”
“The bank is finished,” said another depositor with the bank. “The government can make assurances, but the problem is that no one here trusts the government.”
In Mazar-I-Sharif, a teller at the main Kabul Bank branch said depositors had withdrawn around 26 million dollars yesterday, and the bank had taken four deliveries of cash.
One depositor, Mohammad Rahim, said he wanted to withdraw the 50,000 dollars he had with the bank “after I read the reports that Kabul Bank has gone into the hands of the central bank”.
Fitrat said Wednesday the central bank had not taken over Kabul Bank, as had been reported by the Washington Post newspaper.
The manager of the branch refused to talk to AFP, saying “all this is the fault of journalists”.
In Kandahar, the main southern city that is beset by a Taliban-led insurgency, resident Hafizullah said: “I’ve got 6,000 dollars in my account and I want to take it all out.” 

AFP