Kabul Bank is a commercial bank in Afghanistan, with its main branch in the capital of Kabul. Established in 2004, it is the main bank used to pay the salaries of the army and security forces. The bank provides facilities to maintain accounts in Current, Savings Bank and Fixed Deposits; and offers its consumers branch and ATM services. The bank is under the supervision of Da Afghanistan Bank (DAB), which is the central bank of Afghanistan.
The bank was involved in a major financial scandal in 2010, when its Chairman Sherkhan Farnood and other insiders were spending the bank's $1 billion for their own personal lavish style living as well as lending money under the table to family, relatives and friends. In September 2010, one of the principal owners of the bank, said that depositors had withdrawn $180 million in two days and predicted a "revolution" in the country's financial system unless the Afghan government and the United States moved quickly to help stabilize the bank. In November 2010, reports appeared that Farnood and chief executive Khalilullah Frozi both had been sacked from duties; as of early 2011 both were effectively under house arrest and could not leave the country, and in July 2011 both were formally arrested and detained in Kabul. DAB stated in February 2011, it would seek to sell Kabul Bank within three years once it was rehabilitated, but both the International Monetary Fund and US officials subsequently pressed for a rapid winddown of the institution. A recent USAID inspector general report estimated that fraudulent loans diverted $850 million to bank insiders. As of October 2011, more than a year after the government seized control, officials have recovered less than 10 percent of the nearly $1 billion that went missing.
Kabul ( /ˈkɑːbəl/, /ˈkɑːbuːl/; Pashto: کابل Kābəl, IPA: [kɑˈbəl]; Persian: کابل Kābol, IPA: [kɒːˈbol]), also spelled Cabool, Caubul or Cabul, mostly in historical contexts, is the capital and largest city of Afghanistan. Kabul is the 5th fastest growing city in the world [2] and the world's 64th largest city [3]. It is also the capital of Kabul Province, located in the eastern section of Afghanistan. According to latest estimates, the population of the Kabul metropolitan area is over 4 million.
The city serves as the nation's cultural and learning centre, situated 1,791 metres (5,876 ft) above sea level in a narrow valley, wedged between the Hindu Kush mountains along the Kabul River. It is linked with Kandahar, Herat and Mazar-e Sharif via the circular Highway 1 that stretches across Afghanistan. It is also the start of the main road to Jalalabad and further to Peshawar, Pakistan. The Kabul International Airport is located about 16 kilometres (9.9 mi) from the center of the city, next to the Wazir Akbar Khan neighborhood. Bagram Airfield is about 40 kilometres (25 mi) northeast of Kabul.
Sherkhan Farnood was the Chairman of Kabul Bank until late 2010, which is Afghanistan's largest private financial institution with over 1 million customers. Farnood holds 28.16% of the shares in the Kabul Bank. He also owns Pamir Airways, in partnership with Khalilullah Fruzi/Frozi, Mohammed Fahim and possibly others. According to media reports, by November 2010 Da Afghanistan Bank insisted both Farnood and Kabul Bank chief executive Frozi had been removed from bank management;. As of early 2011 both are effectively under house arrest and cannot leave the country.
An ethnic Uzbek, Farnood is originally from the northern Kunduz Province of Afghanistan. He received education and a start in business in Moscow, Russia. During the 1980s and 1990s, he ran a hawala, or an informal money transfer organization in Moscow. The hawala was reportedly used by heroin and opium smugglers to transfer money to Tajikistan and Afghanistan. In 1998, the hawala was closed down by Russian authorities for money laundering and its role in the transfer of drug money; Farnood, who had left Russia shortly beforehand, escaped arrest. Sherkhan operated in Russia under the name "Sherhan Mohammad Morad."