IMF says embattled Kabul Bank should be taken over
TEXT OF STORY
STEVE CHIOTAKIS: We begin in Afghanistan, where the International Monetary Fund just completed a look at the economy there. The IMF says management of the country’s largest private bank, Kabul Bank, should be taken over by someone — anyone. Corruption and mismanagement there has cost Kabul Bank hundreds of millions of dollars.
The BBC’s Quentin Sommerville joins us from Kabul with more. Good morning, sir.
QUENTIN SOMMERVILLE: Good morning.
CHIOTAKIS: Remind us exactly what happened at this bank. Where did this money go?
SOMMERVILLE: Well this isn’t any ordinary bank. If you can imagine a bank that pretty much pays everybody’s salary in the country. Kabul Bank had the president’s brother on the board, Mahmood Karzai. So it’s a very well connected bank, but it turned out that it had huge loans, many of those loans given with very uncertain terms. No payback date, and that’s what caused the bank to almost collapse and the central banking in Afghanistan had to step in and effectively build the bank out.
CHIOTAKIS: And how have authorities responded there Quintin?
SOMMERVILLE: They’ve gone through the books with a fine toothed comb. The U.S. Treasury Department’s involved in one of them. And it discovered that almost like $600 million worth of loans are outstanding. And what they’ve been doing is very carefully going through and making sure that they can renegotiate those loans and get the people who borrowed the money to pay it back.
CHIOTAKIS: The BBC’s Quentin Sommerville in Kabul. Quentin thank you so much.
SOMMERVILLE: You’re welcome.
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