LAHORE: MCB Bank Ltd has decided to purchase New Kabul Bank, which was defrauded in 2010 after its owners embezzled $825 million.
“The Pakistani bank is one of two preferred bidders,” Mohammad Aqa Kohistani, treasury director in Afghanistan’s Finance Ministry, told Bloomberg, adding, “Within four months, the bank will be privatized and sold to one of them.”
The second bidder is a local Afghan company that has vowed to invest $1 billion if announced the winner, Kohistani said. MCB Bank has proved it has enough funds to buy New Kabul Bank and has placed a $20 million guarantee, matching the minimum needed under Afghan law, while the Afghan company has provided $168 million, Kohistani said. MCB Bank’s head of corporate finance and international banking Muhtashim Ashai declined to comment.
While privatisation of New Kabul Bank would rid Afghan President Ashraf Ghani of a headache that US investigators say has lost $65 million over the past six years, analysts are sceptical about whether a Pakistani lender would win confidence.
“Given the two nations’ troubled relations, it seems hardly likely that a Pakistani firm will be awarded the contract,” says Sayed Massoud, who teaches economics at Kabul University. “I don’t think Pakistanis will be welcomed here by our depositors.”
A border skirmish has further strained relations, prompting Afghans to purchase fewer Pakistani goods, according to the Afghanistan Investment Support Agency. Just 10 percent of the country’s 30 million population hold a bank account.
