A top banker in Afghanistan has voiced his fears that more local lenders are running the type of pyramid schemes that toppled Kabul Bank and that threaten to bring the entire Afghan economy to a screeching halt.
Last year’s collapse of Kabul Bank with debts of up to $910 million led to the country’s largest bank being nationalized, its shareholders being stripped of voting rights, and failed loans being placed in receivership.
Afghan politicians seeking to pay for a $820 million bailout using funds from a weary international community have run into trouble in the shape of the IMF, which wants Kabul to fund the bailout using local tax revenues.
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