June 27, 2011 / 5:11 PM / 7 years ago

Afghan central banker resigns, fears for life

CHANTILLY, Virginia (Reuters) - Afghanistan central bank Governor Adbul Qadir Fitrat said on Monday he has resigned his post because he feared for his life for his role in investigating a scandal surrounding Kabulbank.

“The reason I was not able to resign in Kabul was because my life was completely in danger,” Fitrat told Reuters Insider in an interview at a hotel in a northern Virginia suburb of Washington.

“This was particularly true after I spoke to the parliament and exposed some people who were responsible for the crisis of Kabulbank,” Fitrat said, adding he thought that move would bring closure to the corruption scandal at the bank.

Instead, “it brought more dangers and more conspiracies against me and my life,” Fitrat said.

Corruption, bad loans and mismanagement cost the politically well-connected Kabulbank, Afghanistan’s biggest private lender, hundreds of millions of dollars in what Western officials in Afghanistan openly call a classic Ponzi scheme.

Fitrat also said “high political authorities” in Kabul had undermined the central bank’s effort to investigate Kabulbank.

“I do not want to continue as a figurehead. I want to be an effective central bank governor,” Fitrat said.

Asked if he was referring to Afghanistan President Hamid Karzai, Fitrat answered: “I just refer to high political authorities of the country.”

In Kabul, the Afghan government said it was not aware Fitrat had resigned but said he was partly responsible for the fraud scandal that led to the collapse of Kabulbank.


Waheed Omer, the chief spokesman for Karzai, told Reuters in Kabul that Fitrat’s name was on a list of people the attorney general’s office planned to prosecute over the scandal.

“This is not a resignation, this is treason to the Afghan people and a very irresponsible act,” Omer said.

The 48-year-old Fitrat said he expected that reaction from the Afghan government, which he accused of trying to shift the blame for the Kabulbank scandal to the central bank.

Fitrat said the central bank has been the one pushing for prosecutions in the case, and he knew of no list of individuals the Karzai government was pursuing.

“After Kabulbank’s collapse, I requested a special prosecution and a special tribunal to try and prosecute those people who were implicated in Kabulbank’s fraud .... Unfortunately, to date, there is no information of any credible plan to prosecute those individuals,” Fitrat said.

“Instead, the law enforcement agencies (have) turned their guns against the staff of the central bank,” he said.

The bespectacled, balding U.S.-trained economist was accompanied by two friends and appeared at ease, despite his concern for his safety. He booked a room at a mid-price hotel near Dulles International Airport to announce his resignation but only Reuters and an Afghan news agency showed up.

Kabulbank doled out nearly half a billion dollars in unsecured, undocumented loans to a roster of Kabul’s elite, including ministers, relatives of Karzai and a vice president, and a powerful former warlord, anti-corruption officials say.

While the Afghan government belatedly approved the central bank’s request for a forensic audit of Kabulbank, it has blocked one for another Afghan bank believe involved in the scandal, Fitrat said.

“If I‘m not able to effectively supervise the banking sector, it is better for me to go away honorably,” he said.

The scandal has endangered future support for Afghanistan through the International Monetary Fund.

Last week, talks between Afghanistan and the IMF appeared to have broken down after Afghanistan’s finance minister Omar Zakhilwal called them a “waste of my time.”

Fitrat’s resignation comes as a shock as, up until now, he had been eager to rehabilitate Kabulbank and had defended the central bank’s role in the affair.


In February, he had brushed aside concerns the bank would have to be liquidated, telling Reuters in Kabul he hoped it would be privately owned again within two or three years.

However, the IMF is demanding action to ensure the type of problems that arose at Kabulbank are not repeated before it provides any further aid to Afghanistan. It has been adamant that the bank must be broken up and the remaining assets sold.

IMF backing is a crucial seal of approval for many international donors before they pledge assistance to aid-reliant Afghanistan. Tens of millions of dollars in scheduled aid payments have been delayed over the past three months because of the impasse between Kabul and the IMF.

Fitrat said last September the central bank had stepped in to take control of Kabulbank.

Despite Fitrat’s optimism then, talks between the Afghan government and the IMF and international donors have faltered badly in recent weeks as authorities tried to agree on ways to wind up Kabulbank and bolster Afghanistan’s fledging financial sector so such a scandal could not be repeated.

Fitrat told Reuters on Monday that talks between the Afghan government and the IMF were “stalled.”

In Washington, State Department spokeswoman Victoria Nuland said the United States would continue to urge the reform and strengthening of the Afghan financial sector [ID:nN1E75Q14N]

Fitrat took over as head of the central bank in 2007 after being nominated by Karzai. He also held the position briefly in 1996, the year the Taliban came to power in Afghanistan.

He served as an economic consultant to the IMF in Washington in the late 1990s, was in private banking in Northern Virginia after 2000 and then served as an adviser to the World Bank until 2007.

Additional reporting by Paul Tait in Kabul; editing by Vicki Allen and Philip Barbara

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