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Mps concern over privatization of New Kabul Bank

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(Last Updated On: October 25, 2022)

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Members of the parliament have expressed their concerns over privatization of the New Kabul Bank which is probably to be sold to a Pakistani Bank called Muslim Commercial Bank, fearing that Pakistan intelligent office will have longer hands into Afghanistan confidential information.

Earlier last week officials in Ministry of Finance had announced that MCB and the local firm, Join-Stock, are eligible buyers, the announcement had provoked many reactions within the Afghan Government and economy expert’s level.

Afghan economical expert Sayed Masoud said,” Muslim Commercial Bank is one of the Military Bank of Pakistan, Afghan President should considerate over the issue, since the New Kabul Bank has 80 agencies Nationwide only for Afghan military forces if the following Bank is owned it will disclose all the secret information of Afghan military forces to Pakistan.”

“Countries in the world in order to gain secret information spend millions of dollars to meet their goals , but Afghanistan Government is allowing Pakistan to access confidential information free of charge economy expert Azarakhsh Hafizi said,”

Mp Ghulam Farooq Majroh said,” Pakistan has been continuously working against Afghanistan’s National interests, we should let Pakistan to have hands in our Banking system.”

Meanwhile Ministry of Finance Spokesman Ajmal Abdulrahimzai said,” if any banks doesn’t have criminal cases in the past and can meet our requirement will be eligible to be one of the buyers.”

Kabul Bank is a commercial bank in Afghanistan that has its main branch in the capital of Kabul. Established in 2004, from the beginning the following main bank used to pay the salaries of the army and security forces.

The bank provides facilities to maintain accounts in Current, Savings Bank and Fixed Deposits; and offers its consumers branch and automated teller machine services.

The bank was under the supervision of Da Afghanistan Bank (DAB), the central bank of Afghanistan.

The scandal has not only earned bad image for the country but also pushed investors away. Even the bailout failed to address the economic crunch and restore customers’ trust over the country’s largest private bank. It is a biggest scandal in Afghanistan’s banking sector history.

Kabul Bank was badly shaken and almost collapsed in one of “the worst banking scandals in history,” according to The Guardian newspaper in late 2012, according to the Los Angeles Times, independent investigators and journalists uncovered widespread corruption in Kabul Bank.

The New York Times, in 2012, headlines indicate “Audit Says Kabul Bank Began as ‘Ponzi Scheme’” following investigation and judicial action in the aftermath of the Bank’s crisis and scandal.

In 2010, it was disclosed that its Chairman Sherkhan Farnood and other insiders were spending the bank’s US$1 billion for their own personal lavish style living and lending money under the table to family, relatives and friends.

The bank scandal also involved members of Afghan President Karzai’s family, including one of his brothers, Mahmood Karzai. In September 2010, one of the principal owners of the bank, said that depositors had withdrawn $180 million in two days and predicted a “revolution” in the country’s financial system unless the Afghan government and the United States moved quickly to help stabilize the bank.

In November 2010, reports appeared that Farnood and chief executive Khalilullah Frozi both had been sacked from duties.

As of early 2011 both were effectively under house arrest and could not leave the country, and in July 2011 both were formally arrested and detained in Kabul.

DAB stated in February 2011, it would seek to sell Kabul Bank within three years once it was rehabilitated, but both the International Monetary Fund and US officials subsequently pressed for a rapid wind down of the institution.

Several influential people were involved in the scandal. Therefore, the government failed to catch and punish the bigwigs. Sadly, the authorities were not serious to build confidence to investors. They tried to rebuild the bank’s image by adding ‘New’ to its name though the bank has nothing new to offer.

A USAID inspector general report estimated that fraudulent loans diverted $850 million to bank insiders.[8] By October 2011, more than a year after the government seized control, officials had recovered less than 10 percent of the nearly $1 billion that went missing.

After the huge scandal of New Kabul Bank the Afghan Government decided to start bidding process to sell the following Bank to any firms that can meet the conditions.

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Afghanistan, Pakistan agree to abandon barter trade, establish banking relationships

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(Last Updated On: March 29, 2024)

Afghanistan and Pakistan agreed to abandon barter trade and to establish banking relationships during the two-day talks in Kabul, the Islamic Emirate’s spokesman Zabihullah Mujahid announced late Thursday.

The agreement came during talks between Afghan delegation led by Acting Minister of Industry and Commerce, Nooruddin Azizi, and the Pakistani delegation led by Federal Secretary of Commerce Muhammad Khurram Agha.

It was agreed that the Pakistani side will facilitate the transfer of goods from international containers to regional containers in the ports of Karachi in the next six months, Mujahid said in a statement.

An agreement was made regarding preferential trade, where both sides will give tariff preferences to those 10 items of export goods, 8 of which are agricultural and 2 items are industrial.

The sides agreed on a temporary free license for truck traffic for one year as a trial period, which will be implemented from May 2024.

They also reached an agreement regarding the transfer of goods through the airports of the two countries in the form of multi-modal air transit, which will start in the next two months.

As part of Pakistan’s recent measures regarding Afghanistan’s transit goods, it was agreed that within a week, the mandatory bank guarantee should be removed and insurance should be used as before, in consultation with the parties, the necessary measures will be taken to remove other obstacles.

The export of coal from Afghanistan to Pakistan was also discussed and the Pakistani side expressed its readiness to buy it at the international price, according to the statement.

Earlier Pakistan’s Charge d’Affaires for Afghanistan, Ubaid-ur-Rehman Nizamani said in a video message on Wednesday that the recent trade talks in Kabul had been “successful” and that he hoped this would give fresh impetus to bilateral trade between the two countries.

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Pakistan’s commerce delegation wraps up ‘successful’ trip to Kabul

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(Last Updated On: March 28, 2024)

Pakistan’s Charge d’Affaires for Afghanistan, Ubaid-ur-Rehman Nizamani said in a video message on Wednesday that the recent talks between Islamabad’s commerce delegation and Afghan officials had been “successful” and that he hoped this would give fresh impetus to bilateral trade between the two countries.

“I’m happy to report that this was a successful visit and both sides have agreed to work together for mutual benefit on a number of areas.

“They will facilitate transit, they will facilitate bilateral trade and they will take all possible measures that create an environment for continuous and productive trade and economic relations between the two countries,” he said.

The delegation, led by Commerce Ministry Secretary Khurram Agha, arrived in Kabul on Monday and had numerous talks on various issues with Islamic Emirate officials.

The visit came amid deteriorating bilateral relations following several suicide attacks in Pakistan in the last couple of months that Islamabad attributes to the Tehreek-e-Taliban Pakistan (TTP) militants, a group they claim is based in Afghanistan.

Diplomatic tensions between the two countries over the last few months have led to economic losses, as key border crossings for trade and travel have closed intermittently, resulting in goods trucks being held up at border posts.

Afghanistan’s Minister for Industry and Commerce Nurudin Azizi meanwhile said the IEA had held fruitful negotiations in a cordial environment with the visiting delegation.

“We discussed in detail with the Pakistani side specific issues related to heavy transport vehicles that will be resolved,” he said.

“We will achieve positive results as our discussions remained productive.”

Azizi said Afghanistan expected to sign a formal agreement with Pakistan within six months, allowing Pakistani trucks to enter Afghanistan and travel to the Central Asian states and Afghan trucks to go all the way to the Pakistani port cities of Karachi and Gwadar.

Apart from discussing trade-related issues, the two sides also focused on movement of passengers, patients and businesspeople across their common border during these talks.

Azizi noted uninterrupted trade and business between Kabul and Islamabad would play a significant role in creating a peaceful environment between the two countries and facilitate their economic development.

He said the two sides also pledged to enhance their existing trade volume, adding that both countries could become ideal markets for each other if they did not allow business to be affected by any geopolitical tensions.

Azizi also said Afghanistan could export agricultural products to China and other countries via Pakistan’s ports and cities.

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Turkey’s 77 keen to start up cement plant in Jawzjan

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(Last Updated On: March 27, 2024)

Turkish construction company 77 officials have met with the acting minister of mines and petroleum, Shahabuddin Delawar, about investing in a cement factory in Yatim Taq area of Jawzjan province.

The minister, Shahabuddin Dalawar, has said the ministry will cooperate with the company but first needs a proposal, including details around how they plan to implement the project as well as social development plans.

Turkey’s 77 company has been working on electricity generation projects in Afghanistan for several years.

A number of industrialists say that if more investment is made in the cement production sector, not only will domestic demand be met, but the country’s cement will also be exported.

At the moment, cement is being produced by private companies in the provinces of Kandahar, Parwan and Herat.

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