ALTHOUGH Kabul Bank officials came out and contradicted news stories in various international newspapers on Sunday that said the bank was up to $900 million in the red, the seemingly well-documented charges certainly merit the serious investigation already underway into Afghanistan's third largest bank. The investigation comes four months following the discovery of irregularities that led to a week-long run on the bank. Even if the final red figure turns out to be less than that reported, it is clear that loans beyond the legal limits were made, some to politically influential board members. Other money has simply disappeared while some was lost on real estate investments in Dubai. Moving quickly and accurately with the investigation is of paramount importance. Financial donors are already reassessing the Afghan banking system, with an eye toward deciding whether to continue activities in Afghanistan or abandon operations there. Afghanistan cannot function effectively as a country without foreign assistance. Its banking system, in particular, is a new addition to the country's economy, designed and implemented by the US and NATO countries, and buffeted by systemic corruption, the bane of the entire Hamid Karzai government. The investigation comes against a backdrop of an increasingly troubled Afghan banking industry, which has drawn the attention of the International Monetary Fund. It is seeking an overhaul of the entire Afghan banking system and has delayed its renewal of its main credit program for Afghanistan until the financial system's problems are addressed. Among the IMF's demands are that Kabul Bank, as well as other Afghan banks, undergo an outside audit, and that steps be taken to tighten banking sector supervision. It also wants the government to come up with a plan for ensuring that the losses from Kabul Bank do not continue to mount. This is perhaps one instance where a multiplicity of interests could dovetail into concrete steps being taken to shore up a piece of the Afghan economy. And those holding responsibility for running Kabul Bank into the ground will have to face the music for their actions. __
