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Afghan Anticorruption Commission Attacks Regulators In Bank Scandal

Some analysts have warned that the collapse of Kabul Bank would shatter confidence in the entire Afghan banking system.
Afghan anticorruption officials have criticized regulators for not doing more to prevent fiscal mismanagement that brought the country's largest private bank to the brink of collapse earlier this year.

Kabul Bank has a total of $925 million in outstanding loans. It was taken over by the Central Bank last fall amid promises by the Afghan government that it would be dismantled and restructured according to the requirements of the International Monetary Fund.

Progress has been slow, however, with the government's High Office of Oversight and Anticorruption commission today singling out the country's Central Bank for poor monitoring as part of a 30-page report on the scandal.

The evaluation, which is to be sent to President Hamid Karzai, also suggested the government would only be able recover some two-thirds of the undocumented loans that had been given to a number of powerful Afghan figures, including sitting cabinet ministers.

Both Kabul Bank and the Central Bank are reported to have close ties to the Afghan government.

compiled from agency reports