Afghanistan's new central bank governor expressed confidence Sunday that the government can recover up to 80 percent of the $825 million it cost to bail out the private Kabul Bank.
The near-collapse last year of Kabul Bank, once the nation's largest private lender, created economic and political turmoil, prompted the freezing of some international aid and became a symbol of the country's deep-rooted corruption.
According to the International Monetary Fund, Kabul Bank operated like a "Ponzi scheme" that resulted in fraud on a massive scale. The case has been closely followed by international donors because it is seen as a test of government officials' pledge to root out patronage and graft and to show accountability to world financial institutions such as the IMF.
Last month, the IMF approved a three-year $133.6 million loan for Afghanistan because it found the government had taken steps to address governance and accountability issues that surfaced during the Kabul Bank crisis. The decision reassured international donors, many whom had withheld aid while waiting for the IMF decision.
Since the crisis, Kabul Bank has been split into two parts _a healthy one being run by the Afghan Finance Ministry, and another which is has taken over hundreds of millions of dollars in bad loans. The Afghan government hopes to put the healthy bank up for sale in the middle of next year.
Central bank chief Noorullah Delawari said 80 percent of the $825 million has been identified as receivable, and the bank hopes to get 20 percent back in the near term, and 60 percent in one to five years. It was still working to identify 20 percent of the funds _ or about $152 million _ still missing.
"A total of $825 million has been paid so far by the central bank and the government to Kabul Bank. Of that, $80 million has been received from the loans which were given by the Kabul Bank to individuals, almost 20 percent is going to come back in the near future and that is from properties mostly in Dubai and in Kabul," Delawari said.
He added that a delegation would travel to Dubai in coming days for meetings with officials there to find properties owned by those who took loans. Those properties would then be seized and sold.
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