Monday, August 07, 2017


Corruption Charges

1. (SBU) SUMMARY: Pashtany Bank President Hayat Dayani condemned allegations of corruption and mismanagement by critics in the Afghan finance industry and by Central Bank examiners as coordinated attacks by private sector bank owners who seek a competitive edge against state-owned banks which hold a significant market share of active customers. However, both Afghan Central Bank Governor Fitrat and Finance Minister Zakhilwal have expressed concern to Embassy officers about the health and activities of Pashtany Bank. They are both eager to remove Dayani from office as one step in a reform process that could include consolidating Pashtany with its sister state-owned Bank Millie and opening state-owned bank ownership to private shareholder investment. Such reform measures would require parliamentary approval and currently sitting ministers may be reluctant to proceed with reform measures until parliament confirms the cabinet picks of the incoming administration. End Summary.

2. (SBU) On August 4, Treasury Attach met with Pashtany Bank President Hayat Dayani to discuss successes at the bank, as well as a series of allegations made against him by critics in the Afghan finance industry and bank examiners within the Central Bank. Founded in 1954, Pashtany Bank is one of two remaining state-owned banks in Afghanistan and is in the top half of all licensed Afghan banks in terms of assets and depositors. Over the past few months, the Central Bank has privately accused Pashtany Bank of corruption, improper loans, and general mismanagement as part of their onsite examination process. Pashtany Bank's primary shareholder is the Ministry of Finance (approximately 96% ownership), which is responsible for making management decisions, including naming senior management and dismissing them as necessary.

3. (SBU) Responding to these allegations against him, Dayani argued that he has been "too successful" in reforming Pashtany Bank and has made enemies in the process, including "elite" private bank owners who are part of a larger "economic mafia." Dayani believes these elites see Pashtany as a threat because the people of Afghanistan prefer a well run state bank over a private bank.- More, EIKENBERRY


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