Karzai assures "Kabul Bank is safe," urges Afghans not to panic

Washington, Sept 3 (ANI): Afghan President Hamid Karzai has assured the his country's citizens that their deposits are safe and urged them not to panic shortly after his brother, a major shareholder in the beleaguered Kabul Bank, called for intervention by the United States to head off a financial meltdown.

"Kabul Bank is safe. People need not panic, need not be worried," the Washington Post quoted Karzai, as saying at a joint news conference at the presidential palace in Kabul with US Defense Secretary Robert M. Gates.

Earlier, Karzai had voiced concern over the Kabul Bank's ability to withstand an onslaught of depositors, demanding their money back saying, "America should do something."

He suggested that the US Treasury Department guarantee funds of Kabul Bank's clients, who number about one million, and have more than a billion dollars in deposits with the bank.

Meanwhile, the bank's ousted chairman, Sherkhan Farnood, said that depositors withdrew 85 million dollars on Wednesday and 109 million dollars on Thursday, leaving Kabul Bank with about 300 million dollars in liquid cash.

Farnood, who is a shareholder, said he hoped the bank could weather the storm without U.S. help, and added: "If we survive Saturday and Sunday, we will be okay. If Kabul Bank collapses, it will be a disaster."

The Treasury Department has sent experts to help the Afghan Central Bank handle the crisis, but it has so far ruled out any injection of U.S. money to revive the Kabul Bank.

Karzai, who owns seven percent of Kabul Bank, has warned that the bank "is stable and has money," and it might take U.S. intervention to beat back panic.

The Kabul Bank has scores of branches across Afghanistan and holds the accounts of key Afghan government agencies. It was also a big contributor to President Karzai's fraud-tainted election campaign last year. (ANI)