Losses at Kabul's largest bank could be $900 million
Added under Afghanistan/Pakistan
Fraud and mismanagement at Afghanistan's largest bank have resulted in potential losses of as much as $900 million–three times previous estimates–heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.
The extent of these losses make it clear that keeping the bank afloat–something the government has said it is determined to do–would require large infusions of cash from an already strained budget.
Banking specialists, businessmen and government officials now fear that word of Kabul Bank's troubles could prompt a run on solvent banks, destroying the country's nascent banking system and shaking the confidence of Western donors already questioning the level of their commitment to Afghanistan.
The scandal has severe political and security implications. Investigators and Afghan businessmen believe that much of the money has gone into the pockets of a small group of privileged and politically connected Afghans, preventing earlier scrutiny of the bank's dealings.
Sources: New York Times
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