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Bulgaria: Counter-Spy Service Investigates State Bank

Sofia, 27 May 1997 (RFE/RL) - Vladimir Manolov, the new acting director of Bulgaria's National Security Service (NSS), said his service is investigating the State Savings Bank (DSK) for allegedly mishandling funds and granting illegal loans to state and commercial banks. Most Bulgarians keep their savings at DSK.

Manolov did not specify which other banks received illegal loans from DSK. But he said the practice is thought to have gone on for a period of several years when former Communists in the Socialist Party controlled parliament and the government.

Bistra Dimitrova, named by the previous Socialist parliament as head of DSK, resigned last week under pressure from the newly elected anti-Communist Prime Minister Ivan Kostov. Bonev said Dimitrova also is under investigation.

More than 14 Bulgarian state and commercial banks have collapsed since 1995 after deposits were siphoned off through the granting of bad loans. Thousands of savers are still waiting to get their money back.

Meanwhile, Interior Minister Bogomil Bonev says secretive financial groups, "especially banking circles," are trying to sabotage a proposed currency board before it is implemented in July. The board would restrict the National Bank's ability to manipulate the exchange rate by linking the Bulgarian lev to hard currency reserves.