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US, Afghans at Odds Over Kabul Bank Reform

Thursday, 07 Oct 2010 12:51 PM

KABUL - The United States and Afghan President Hamid Karzai are at odds over a proposed investigation into Kabul Bank and how to clean up the tottering but politically connected financial institution, according to U.S. and Afghan officials, The Washington Post reports.

The dispute, which flows in part from arguments over a forensic audit of Kabul Bank, has stalled funding for Afghanistan from the International Monetary Fund, which was due to a approve a new $120 million credit line last month. It has also revived tensions over corruption that the Obama administration has tried to calm.

Kabul Bank, Afghanistan's largest private financial institution, nearly collapsed in early September during a run by depositors. This followed moves by the Afghan Central Bank to rein in the freewheeling bank, which bet big on the property market in Dubai and issued off-the-book loans to insiders, including Mahmoud Karzai, the president's brother and a part owner. Kabul Bank helped fund President Karzai's fraud-tainted reelection campaign last year.

Read the entire story at washingtonpost.com

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Thursday, 07 Oct 2010 12:51 PM
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