New Kabul Bank
An Afghan commercial bank established as the successor to Kabul Bank after the 2010–2011 banking crisis.
Last updated August 25, 2026
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Overview
New Kabul Bank is an Afghan commercial bank headquartered in Kabul. Its origins go back to Kabul Bank, which was established in 2004 and became the first private bank founded in Afghanistan after the country’s banking sector began reopening following decades of conflict. The institution developed a nationwide retail and payments role, offering current accounts, savings accounts, fixed-term deposits, branch services, automated teller machine access, and money-transfer facilities connected to the international SWIFT network. It also maintained correspondent relationships with banks in several countries, including Germany, China, Iran, Tajikistan, Saudi Arabia, and India. The bank became central to the payment of salaries for members of Afghanistan’s national army, police, and other public-sector personnel. That role made it important to the functioning of the Afghan state but also exposed it to substantial political and operational risk. In 2010, Kabul Bank experienced a severe liquidity and governance crisis after investigations found that senior insiders had allegedly used bank funds to finance lavish personal spending and preferential loans to relatives, associates, and politically connected figures. The crisis prompted large customer withdrawals, government intervention, international scrutiny, and criminal proceedings. Investigators and later reporting described the misuse of funds as involving hundreds of millions of dollars; estimates varied according to the methodology and stage of the investigation. The Afghan government took control of Kabul Bank during the crisis. The institution was subsequently restructured and re-established as New Kabul Bank in 2011. The change was intended to separate the continuing banking operation from the failed governance and ownership arrangements associated with the original Kabul Bank. Afghanistan’s central bank, Da Afghanistan Bank, together with the Ministry of Finance and the General Directorate of Treasury, supervised or oversaw important aspects of the bank’s operations and public-sector payment role. New Kabul Bank remained associated with efforts to recover misappropriated assets and resolve the financial consequences of the Kabul Bank collapse. Afghan authorities considered returning the institution to private ownership and later invited bids for privatization. A proposed purchase by Afghanistan’s Joint-Stock Company was reported in 2016, while Pakistan’s MCB Bank also submitted a bid during later privatization efforts. The available reference material does not establish a completed sale, a current owner, or a definitive present-day corporate structure. As a brand, New Kabul Bank represents a state-supervised retail and payments institution serving Afghan consumers and public employees. Its core proposition has historically been practical access to deposit accounts, cash services, salary distribution, and domestic and international transfers rather than premium financial positioning. Because reliable current information about its ownership, leadership, website, and operating condition is limited, those fields remain unspecified.
History
Kabul Bank was founded in 2004 as Afghanistan’s first private bank. Its creation reflected the rebuilding of Afghanistan’s formal financial system and the emergence of privately operated banking institutions after the fall of the Taliban regime. The bank expanded its retail footprint and became an important channel for deposits, cash withdrawals, transfers, and government salary payments. Through SWIFT connectivity and correspondent relationships with foreign banks, it also enabled customers to access international fund-transfer services. The institution’s rapid growth was accompanied by weak governance and inadequate controls. In 2010, allegations became public that senior owners and executives had used bank resources for personal enrichment and had extended concealed or preferential loans to relatives, associates, and politically connected individuals. Investigations and later audits produced differing estimates of the total exposure, but the alleged diversion was widely reported as being in the hundreds of millions of dollars. The revelations caused customers to withdraw substantial sums, creating a liquidity emergency and raising concerns about the stability of Afghanistan’s wider banking system. Afghan authorities intervened and assumed control of the bank. The crisis became an international issue because the bank handled salaries for Afghan security personnel and other government workers, and because foreign governments and institutions had supported Afghanistan’s financial-sector development. Da Afghanistan Bank, the Ministry of Finance, the General Directorate of Treasury, the International Monetary Fund, United States officials, and oversight organizations all became involved in debates about stabilization, supervision, receivership, asset recovery, and institutional reform. The crisis also generated criminal and political consequences. Former senior figures, including chairman Sherkhan Farnood and chief executive Khalilullah Frozi, were removed from their duties, restricted, and later arrested. Allegations concerning politically connected borrowers, including figures linked to the Karzai family, intensified public criticism of Afghanistan’s rule of law and financial oversight. International reporting characterized the affair as one of the country’s most serious banking scandals and compared aspects of the bank’s funding and lending model to a Ponzi scheme. These descriptions were part of investigative and media coverage rather than a current statement of New Kabul Bank’s legal status. In 2011 the restructured institution was relaunched as New Kabul Bank. The renamed bank inherited the continuing service functions of the former institution while operating under increased state supervision. It continued to provide current, savings, and fixed-deposit accounts, branch and ATM services, and transfer facilities. Its salary-payment function remained especially important because large numbers of Afghan soldiers, police officers, and public employees depended on bank channels to receive compensation. The successor institution remained tied to the unresolved legacy of the original scandal. Authorities pursued the recovery of funds and considered privatization after the bank had been stabilized. Following the change of national administration in 2014, President Ashraf Ghani’s government renewed efforts to investigate the losses and seek repayment. Reports in 2015 and 2016 described invitations for bids and an offer from Afghanistan’s Joint-Stock Company; MCB Bank of Pakistan was also reported as a bidder in later privatization planning. The supplied sources do not confirm that a sale was completed or identify a definitive current owner. New Kabul Bank’s historical significance therefore lies in two connected roles: it is a basic Afghan banking provider and a key state-payment institution, but it is also the successor to Kabul Bank, whose collapse exposed severe weaknesses in corporate governance, political accountability, auditing, and financial regulation. Current information about its leadership, digital presence, ownership, and business scale is insufficiently documented in the reference material.
- 2016
Purchase offer is reported
[1]Afghanistan’s Joint-Stock Company is reported to have offered to buy New Kabul Bank.
- 2015
Privatization process advances
[1]Authorities invite bids to privatize New Kabul Bank after its period of state control.
- 2014
Fund-recovery investigation is reopened
[1]The Ghani administration renews efforts to investigate and recover funds allegedly lost through the original bank’s fraud and corruption.
- 2011
Institution is relaunched as New Kabul Bank
[1]The restructured bank begins operating under the New Kabul Bank name after the Kabul Bank crisis.
- 2010
Banking crisis becomes public
[1]Allegations of insider lending, misuse of bank funds, and weak controls trigger mass withdrawals and government intervention.
- 2004
Kabul Bank is established
[1]Kabul Bank is founded as Afghanistan’s first private bank in the post-conflict reconstruction period.
Products and positioning
A practical Afghan retail and payments bank with a significant historic role in distributing public-sector salaries and providing basic deposit and transfer services.
Deposit banking
Current accounts
Transaction-oriented accounts for customers who need to hold funds and conduct routine banking activity through New Kabul Bank branches and related service channels. The available reference material identifies current accounts as one of the bank’s core deposit facilities but does not provide detailed fee, eligibility, or digital-banking terms.
Deposit banking
Savings accounts
Savings facilities intended for customers wishing to keep funds with the bank while retaining access to ordinary branch and cash services. Specific interest rates, account conditions, and current availability are not established by the supplied sources.
Term deposits
Fixed deposits
Time-bound deposit accounts in which funds are placed for a defined period. New Kabul Bank is described as offering fixed-deposit facilities, although the reference material does not specify maturities, rates, or withdrawal rules.
Retail banking services
Branch and ATM services
Physical banking access through branches and automated teller machines. These channels support account servicing, cash withdrawals, and other routine customer transactions, with the bank’s precise current network not documented in the supplied material.
Payments and remittances
Fund transfers
Transfer services supported by the bank’s connection to the SWIFT network and correspondent relationships with banks in several countries. The available sources indicate international connectivity but do not provide a current list of supported corridors or services.
Government payments
Public-sector salary payments
A major institutional service through which salaries for Afghan national army personnel, security police, and other public employees were distributed. This role made the bank an important part of Afghanistan’s public-payment infrastructure.
Controversies
2010
Kabul Bank insider-lending and corruption scandal
Investigations alleged that senior insiders diverted bank resources for personal spending and made improper loans to relatives, associates, and politically connected figures. The revelations caused a run on deposits, government intervention, criminal proceedings, and international criticism of Afghanistan’s financial oversight.
Brand decisions
2015
Privatization of New Kabul BankM&ABackground
After the bank had been stabilized under state control, Afghan authorities sought to return it to private ownership.
Action taken
The government invited bids and began evaluating prospective buyers.
Aftermath
A completed transaction and the resulting ownership structure are not confirmed in the supplied reference material.
2011
Relaunch under the New Kabul Bank nameGeneration changeBackground
The original Kabul Bank’s governance and ownership structure had been discredited by the scandal and state takeover.
Action taken
The restructured operating bank was re-established as New Kabul Bank.
Aftermath
New Kabul Bank continued core deposit, cash, transfer, and public-salary services under government and central-bank oversight.
2010
Government intervention and stabilizationStrategyBackground
A liquidity run and allegations of extensive insider misconduct threatened the bank and raised concerns about the stability of Afghanistan’s banking system.
Action taken
Afghan authorities took control of the institution and worked with financial regulators and international stakeholders on stabilization, supervision, and recovery measures.
Aftermath
The intervention preserved the bank’s payment functions but left unresolved questions about asset recovery, accountability, and the future ownership of the institution.
Sources1 sources
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