Afghan lawmakers OK funds for Kabul Bank bailout

AP, Saturday 15 Oct 2011

Parliament agrees to provide up to $825 million to recapitalise central bank after graft investigations

Afghan lawmakers have agreed to reimburse the government for bailing out the Kabul Bank, which nearly collapsed last year.

The lower house on Saturday passed a bill to provide up to US$825 million over the next eight years to recapitalise Afghanistan's central bank.

The bank's troubles began after reports that top bank executives issued more than $800 million worth of questionable loans to shareholders, Afghan officials and friends.

Finance Minister Omar Zakhilwal says he hopes Saturday's decision will lead the International Monetary Fund to extend Afghanistan a new line of credit.
Afghanistan has been without IMF backing for more than a year, threatening to choke off billions in aid to the country.

Zakhilwal says $70 million worth of questionable loans has been recovered.

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