AFP
08/31/2010
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KABUL - Afghanistan's central bank governor said Wednesday the country's biggest bank, Kabul Bank, was in no danger of collapse following US media allegations of corruption.

Abdul Qadir Fitrat said two senior executives of Kabul Bank had not been forced from office but had resigned after the introduction of new rules forbidding shareholders from holding senior positions.

"The central bank, the government of Afghanistan, is standing behind Kabul Bank and will never allow it to collapse," Fitrat said.

"Kabul Bank has no liquidity problems. Right now the Kabul Bank is functioning all over the country. Kabul Bank will never have liquidity problems in the future, inshallah (God willing)," he said.

Major US newspapers said the central bank had replaced the two top executives at the bank, partly owned by President Hamid Karzai's brother, and ordered its chairman to hand over 160 million dollars' worth of property purchased in Dubai for well-connected insiders.

The Washington Post said the central bank had summoned Kabul Bank's chairman Sher Khan Farnud and chief executive Khalilullah Feruzi to its Kabul offices on Monday and ordered them to resign.

Fitrat denied they had been forced to resign, saying the departure of Farnud and Feruzi had been "a Kabul Bank initiative" conforming to the new regulations.

Asked if the central bank was investigating large loans taken out by shareholders, as alleged in the newspaper reports, he said: "We investigate any irregularities."

The resignations of the two men was "solidly based on the decision of the central bank that we announced two months ago", Fitrat said.

"But unfortunately some media organisations published some rumours and wrong information that Kabul Bank has been taken over by the central bank. We have not taken over Kabul Bank.

"Kabul Bank itself has appointed a new CEO and the rest of the Kabul Bank staff are Kabul Bank staff. The only people who have resigned are the chairman and the CEO. And that is based on the instructions of the central bank."

He refused to go into further detail or address directly the allegations in the reports.

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