IWA: NKB Losses $10 Million Yearly

The New Kabul Bank has a deficit of $10 million annually, Integrity Watch Afghanistan (IWA), an Afghan organization that works to increase transparency, integrity and accountability in Afghanistan said on Saturday.

The bank collapsed in 2010 after losing almost $ 1bn, many of the bank’s staff were sent to prison but the brothers of former President Hamid Karzai and his vice-president who were also involved, were granted immunity.

President Ghani reopened the Kabul Bank inquiry as his first step in a fight against corruption about more than ten months ago saying the time for action has come, but recently only nine Kabul Bank shareholders have agreed to pay their debts in a regular interval.

The bank’s founder, Sherkhan Farnood, and ex-CEO Khalilullah Ferozi were jailed for five years after being convicted last year of taking $810m of the $935m stolen.

Eighteen others were also jailed but Karzai’s brothers and one of his vice-presidents escaped prosecution because they had returned stolen funds.

IWA official said on Saturday in Kabul that after the Kabul Bank bankruptcy the new bank has lost an amount of $65 million yet and the government has failed to collect all loans.

“According to our reports the bank losses about $10 million annually and after the bankruptcy of the bank it has lost about $65 million,” Sayed Ikram Afzali the Executive Director of the IWA said.

IWA emphasizes that Afghanistan’s Central Bank must supervise closely all banks in Afghanistan and report to Afghans.

“We are in the dark, because we cannot supervise the banks internally or externally, no office is disseminating accurate information about the bank activities,” Afzali added.

According to the reports about $222 million was returned back to the bank after a special tribunal set up by Afghanistan’s Supreme Court during Hamid Karzai’s era, but after Ghani resumed the investigations the amount jumped to $480 million as final verdict issued on the biggest banking fraud.