- Associated Press - Thursday, September 2, 2010

KABUL, Afghanistan (AP) — Afghan President Hamid Karzai reassured nervous customers at the troubled Kabul Bank on Thursday, saying every penny of their deposits would be guaranteed by the government.

Larger than usual crowds gathered to withdraw funds from Afghanistan’s largest bank Wednesday and Thursday after two top executives resigned amid allegations of mismanagement and unorthodox real estate loans.

“The Kabul Bank is safe,” Mr. Karzai said in a news conference with visiting U.S. Defense Secretary Robert M. Gates.

Afghan Finance Minister Omar Zakhilwal echoed that message, saying that fears about the stability of Kabul Bank had not sparked a “crisis” at the bank.

“We are 100 percent sure that Kabul Bank is safe,” Mr. Zakhilwal said. “I, as finance minister, am giving you my guarantee that your money is safe — if it’s one Afghani, one dollar, one euro, up to millions… . Kabul Bank is not in danger.”

Afghan television stations broadcast remarks Wednesday night from the central bank governor, Abdul Qadir Fitrat, who insisted that Kabul Bank was solvent and had enough liquidity to meet demands. On Thursday, the Afghanistan Banks Association issued a statement of support for the bank, and Mr. Zakhilwal sought to reassure customers that their deposits were safe.

“The government of Afghanistan guarantees that every penny that they have deposited will be paid back to them if they request it,” he said. “But what we are requesting of the Afghan people is not to rush because rush is not good for them, and it’s not good for the banking system. We guarantee the money.”

Some customers went anyway.

Nazifa Amiri, who works for a foreign aid agency in Kabul, said problems with the bank would have an especially devastating effect on poor Afghans like her.

“I need this money to feed my children, plus we have the festival coming up,” said Ms. Amiri, referring to next week’s celebration of the end of the Muslim holy month of Ramadan.

Ms. Amiri successfully drew her monthly salary of $390 from the bank’s branch in Kabul’s Wazir Akbar Khan neighborhood. However, Defense Ministry employee Mohammad Zami said he had been rebuffed when attempting to withdraw dollars from his account at the same branch, with managers saying more currency was on its way.

“I don’t have a lot of money in it, but this is supposed to be a trustworthy bank to serve the Afghan people. It’s not good to see it tied up in politics,” Mr. Zami said.

A branch manager, who declined to give his name because staff had been ordered not to speak to media, said dollar stocks ran out about one hour after opening, although supplies of Afghan currency were sufficient to meet demand.

Shah Masood Azha, a businessman in the southern city of Kandahar, said residents remained worried about the safety of their accounts.

“This is a result of poor oversight, and the government needs to have many more checks and balances,” Mr. Azha said.

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