Karzai's Brother Wants Bank Bailout
The Washington Post reports:
As depositors thronged branches of Afghanistan's biggest bank, President Hamid Karzai told Afghans on Thursday not to panic shortly after his brother, a major shareholder in the beleaguered Kabul Bank, called for intervention by the United States to head off a financial meltdown.
"Kabul Bank is safe," Karzai said at a joint news conference at the presidential palace in Kabul with Defense Secretary Robert M. Gates. "People need not panic, need not be worried."
Earlier in the day, Mahmoud Karzai voiced concern over Kabul Bank's ability to withstand an onslaught of depositors demanding their money back. "America should do something," he said in a telephone interview. He suggested that the Treasury Department guarantee the funds of Kabul Bank's clients, who number about 1 million and have more than $1 billion on deposit with the bank.
The rush to withdraw funds from Kabul Bank, which handles salary payments for soldiers, police and teachers, began Wednesday, a day after news that Afghanistan's Central Bank had removed the bank's top two executives and installed a Central Bank official as chief executive.
Depositors withdrew $85 million Wednesday and $109 million Thursday, leaving Kabul Bank with about $300 million in liquid cash, said the bank's ousted chairman, Sherkhan Farnood.
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