* IMF team seeks resolution to Kabulbank scandal
* Assessment urges plan to stabilize financial system
By JoAnne Allen
WASHINGTON, Feb 15 Afghanistan's largest
private bank, Kabulbank, should be placed in receivership as
part of the government's plan to stabilize the country's
financial system, an International Monetary Fund assessment
recommended on Tuesday.
"The goal should be to design and implement a plan that is
transparent, credible, and fully financed," an IMF assessment
team said in a statement as it ended an 11-day visit to Kabul
to review Afghanistan's economic posture.
The team recommended putting Kabulbank under receivership,
"which is the most appropriate mechanism for successful
resolution of the bank."
The IMF assessment also said the government needed to
clearly explain what was being done to deal with the bank and
to protect the banking system. It added that the government
should ensure that any illegal behavior or fraud linked to the
bank scandal is prosecuted.
"This will be followed by a process where the bank will be
rapidly sold or wound down and the central bank is
recapitalized with government resources as needed," the
Corruption, bad loans and mismanagement cost Kabulbank
hundreds of millions of dollars.
Among three senior Kabulbank executives and shareholders
under investigation is the brother of Afghanistan's First Vice
President Mohammad Qasim Fahim.
Another major shareholder is Mahmoud Karzai, the brother of
President Hamid Karzai, although Mahmoud Karzai is not under
An IMF team visited Kabul Feb. 5-15 to assess Afghanistan's
economic conditions and the future of the Fund's support for
The IMF assessment indicated that a resolution plan for
Kabulbank and measures to increase transparency and
accountability in the banking system would be key as the Fund
considers any new financial support for Afghanistan.
It did note that some positive steps that had been taken
"The authorities have taken measures to reassure
depositors, put the bank under the control of the central bank,
and suspended shareholders' rights," the statement said. "They
are now finalizing a comprehensive plan to address the
outstanding issues with Kabulbank."
(Editing by Gary Hill)