A Dubai-based conglomerate is seeking approval to buy a bank in Afghanistan as authorities there try to restore confidence in the scandal-tainted financial industry.
The CEO of Alokozay Group's Afghan operations said in an interview Sunday the family company sees "great potential" in the nation's banking sector despite decades of war and the near collapse of the country's largest private lender amid corruption problems last year.
"We want to bring in professionals and set up a bank that's basically recognised world-wide," Jalil Alokozay told The Associated Press. "If someone comes in and has a proper plan and empowers the professionals, then there are lots of opportunities here in Afghanistan."
Alokozay declined to name the bank the company is aiming to buy or provide financial terms of the deal, which he said was at an advanced stage. The lender is a relatively small bank involved in extending microfinance loans to poor borrowers, he said. Afghanistan's central bank has already conducted background checks on the Dubai suitor and is in the process of reviewing the acquisition, Alokozay said. He hopes to complete the deal in the next six to eight weeks.
Authorities in Kabul have granted licenses to 17 private banks, according to the central bank, but a spokesman was unable to provide information on the Alokozay Group's bid.
Alokozay Group's move could inject new life into Afghanistan's troubled banking industry. It is reeling from a still unresolved scandal involving Kabul Bank, the country's largest private lender, that sparked a financial panic when it nearly collapsed last year.
Afghan officials are stepping up efforts to recover an estimated $909 million worth of fraudulent loans and accrued tax and interest tied to Kabul Bank. They have had little success so far.
Troubles at Kabul Bank now under the control of the central bank have raised alarm bells for Afghanistan's international donors by calling into question the soundness and oversight of the country's fledgling banking system. Kabul Bank had close ties to Afghanistan's political elite, including the brother of President Hamid Karzai, and plays a key role in the local economy by handling the payrolls for government workers and security forces.
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