September 3, 2010 in Nation/World

Afghans pull funds from troubled bank

Los Angeles Times
 

KABUL, Afghanistan – Afghans on Thursday rushed to withdraw their savings from troubled Kabul Bank despite attempts by officials to reassure nervous depositors that their money was safe.

But the scramble, which followed U.S. news reports that Afghanistan’s largest private bank faced liquidity problems, had not yet risen to the level of a bank run.

At the bank’s main branch in Kabul, hundreds of frustrated customers crowded the counters, many shouting or elbowing for a number to get served.

The rush followed the resignation of two of the bank’s top executives this week amid allegations of mismanagement and questionable real estate loans; the New York Times reported Tuesday that the bank’s losses could exceed $300 million, more than its assets.

The bank’s woes come at a time when Washington is increasingly concerned about corruption in President Hamid Karzai’s inner circle. The bank is partly owned by the leader’s brother Mahmoud Karzai.


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