WHAT: Panicked crowds of depositors pulled at least $90 million from Kabul Bank this week after Afghanistan’s Central Bank authorities ousted the chairman and CEO over accusations about suspicious major loans to the bank’s own shareholders and other well-connected insiders.
WHY IT’S OUTRAGEOUS: Kabul Bank handles salary payments for soldiers, police and teachers. Its dozens of branches hold accounts of key Afghan government agencies. The third-biggest shareholder is President Hamid Karzai’s older brother, who lives luxuriously in Dubai.
HIGH RISK: Collapse of the Kabul Bank would likely spread meltdown throughout Afghanistan’s infant financial sector and wipe out nine years of effort by the United States to establish the kind of trustworthy Afghan banking system necessary for establishing a viable economy.
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