Afghan central bank denies fault in banking crisis

AP News
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Posted: May 30, 2011 7:35 AM
Afghan central bank denies fault in banking crisis

The head of Afghanistan's central bank says he and others there are not at fault for the collapse of the nation's largest private bank after it made hundreds of millions of dollars in questionable loans.

Central bank chief Abdul Qadir Fitrat told journalists Monday that he would "categorically reject" a government commission report blaming his regulators for the failure of Kabul Bank. Fitrat said the central bank asked for assistance from the U.S. and the International Monetary Fund after discovering the problems.

Fitrat said: "Central banks by themselves are not capable of detecting fraud if they are highly complicated."

Kabul Bank has been in turmoil since it was discovered that shareholders lent themselves millions to invest in luxurious mansions abroad and risky prestige projects at home.