KABUL - Afghanistan could run into a severe financial crisis if Parliament did not approve a $52 million fund to bail out Kabul Bank, Minister of Finance Hazrat Omar Zakhilwal warned on Saturday.
The International Monetary Fund (IMF) has said it will not deliver new aid to Afghanistan as long as it does not resolve issues with banks, the finance minister told lawmakers.
Kabul Bank, the country's largest private bank, faced financial problems due to unauthorized loans and other anomalies last year. Later, the Ministry of Finance accepted some shares of the bank, currently operating under the name of New Kabul Bank.
In order to resolve the banking crisis, the Ministry of Finance sought $73 million, but legislators declined the request.
With $22 million of the $73 million loans having been recovered, the minister urged MPs to approve a $52 million bailout package for the troubled bank. "If this money is not approved, IMF will not aid Afghanistan. And in two to three months, the country will face a cash crunch."
On account of budgetary problems, he added, the IMF suspended aid to the impoverished country since March. At the moment, almost the entire development spending and 50 percent of the normal budget comes through foreign aid.
Acting Director of Da Afghanistan Bank Mohibullah Safi shared the finance minister's concerns. Problems in the audit section of banks must be addressed, he stressed, saying that two foreign institutions were ready to undertake the audit of banks.
But Wolesi Jirga member Siddique Ahmad Osmani said they would not okay any bailout for the bank unless those behind crisis were behind bars.
Although he did not name anyone, senior bank officials Khalilullah Ferozi and Sher Khan Farnood are currently under investigation by the attorney general office.
How much money had been stolen from Kabul and Azizi Banks, Osmani asked, but neither Zakhilwal nor Safi answered his query.
Another MP, Gul Pad Shah Hamidi, asked the government officials to provide the house with names of cabinet members and parliamentarians who had obtained loans from the bank.
"This is not my responsibility to disclose their names, because it will be an insult to them," Zakhilwal replied.
Ex-Governor of Da Afghanistan Bank Abdul Qadeer Fitrat had informed the house that Mahmood Karzai, a brother of President Hamid Karzai and a relative of Vice-President Mohammad Qasim Fahim were among Kabul Bank's major loanees.