New Kabul Bank
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| Private bank | |
| Founded | Kabul Bank (2004), New Kabul Bank (2011) |
| Headquarters | Kabul, Afghanistan |
| Website | New Kabul Bank |
New Kabul Bank is a bank in Afghanistan that has its main branch in the capital city of Kabul. It was established in 2004 as the Kabul Bank, the first private bank in Afghanistan. After corruption and scandals it was re-established in 2011 as the New Kabul Bank.
It is the main bank used to pay the salaries of the national army and security police forces. The bank provides facilities to maintain accounts in Current, Savings Bank, and Fixed Deposits; and offers its consumers branch and automated teller machine services. The bank is under the supervision of the Central Bank of Afghanistan (Da Afghanistan Bank−DAB), the General Directorate of Treasury, and the Afghanistan Ministry of Finance (MOF).
Kabul Bank was badly shaken and almost collapsed in 2011, in one of "the worst banking scandals in history," according to The Guardian newspaper. In late 2012, according to the Los Angeles Times, independent investigators and journalists uncovered widespread corruption in Kabul Bank.The New York Times, in 2012, headlines indicate "Audit Says Kabul Bank Began as ‘Ponzi Scheme’" following investigation and judicial action in the aftermath of the Bank's crisis and scandal.
In 2010, it was disclosed that its Chairman Sherkhan Farnood and other insiders were spending the bank's US$1 billion for their own personal lavish style living and lending money under the table to family, relatives and friends. The bank scandal also involved members of Afghan President Karzai's family, including his brother Mahmood Karzai. In September 2010, one of the principal owners of the bank, said that depositors had withdrawn $180 million in two days and predicted a "revolution" in the country's financial system unless the Afghan government and the United States moved quickly to help stabilize the bank. In November 2010, reports appeared that Farnood and chief executive Khalilullah Frozi both had been sacked from duties; as of early 2011 both were effectively under house arrest and could not leave the country, and in July 2011 both were formally arrested and detained in Kabul. DAB stated in February 2011, it would seek to sell Kabul Bank within three years once it was rehabilitated, but both the International Monetary Fund and US officials subsequently pressed for a rapid wind down of the institution. A USAID inspector general report estimated that fraudulent loans diverted $850 million to bank insiders. By October 2011, more than a year after the government seized control, officials had recovered less than 10 percent of the nearly $1 billion that went missing.
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