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IMF Sets New $134 Million Loan For Afghanistan

The International Monetary Fund (IMF) has approved a $134-million loan for Afghanistan after a year of negotiations stalled by a huge banking scandal.

The IMF suspended its credit program for the country because of mismanagement at Kabul Bank -- the country's largest private financial institution -- which gave out hundreds of millions of dollars in fraudulent and questionable loans.

IMF officials said the Afghan government has made progress on putting its financial system in order and beginning the recovery of hundreds of millions of dollars stolen from Kabul Bank.

The IMF said it will release some $19 million as a first tranche of the loan. But Nemat Shafik, IMF deputy managing director, said the Afghan authorities have to "pursue more forcefully" legal action to recover some of the almost $1 billion lost in last year's Kabul Bank collapse.

compiled from agency reports