The 2010 collapse of Kabul Bank, at the time a critically important institution in Afghanistan’s banking system, exposed major regulatory and transaction-related deficits in the system that permitted a large degree of fraud. The involvement of the political elite in the fraud made recovering funds and prosecuting cases extremely difficult. The resolution of the criminal elements and recovery of missing funds have faced the same challenges as before and have fared little better under current president Ashraf Ghani. Strengthening the system of financial oversight offers the best opportunity for success. Donor programs, including the IMF and World Bank, may support the necessary reform.


  • The September 2010 collapse of Kabul Bank as a result of fraud and embezzlement involving the political elite continues to resonate strongly in Afghanistan, epitomizing the proposition that impunity exists for powerful people.
  • The symbolic importance of Kabul Bank was recognized by President Ashraf Ghani, who made it a cornerstone of his anticorruption campaign. But inadequate investigations, questionable legal proceedings, political expediency, obstruction, intimidation, and regulatory weaknesses are still apparent.
  • Criminal court procedures were done hastily to satisfy President Ghani’s interest in demonstrating tangible progress before the London Conference of international donors and Afghan government officials in December 2014. Political constraints and capacity issues at the Attorney General’s Office have also resulted in the absence of any further meaningful investigations into beneficiaries and participants.
  • The Ghani government has focused on recovering stolen assets while paying less attention to the criminal and punitive elements of the case. Although efforts to recover the hundreds of millions of dollars missing from Kabul Bank continue, there has been limited success since the National Unity Government came to power in September 2014. Powerful people are refusing to make timely repayments, and formal requests for legal assistance from other countries have failed to progress sufficiently because of the government’s failure to address technical deficiencies in the documents of request.
  • Progress has been made in the regulatory reforms needed to secure the financial sector, but implementation continues to be problematic, and oversight of some money laundering channels is weak. The Afghan government should focus on strengthening oversight of money service providers and the reporting and investigation of large cash transfers and suspicious transactions.

About the Report

The collapse of Kabul Bank in 2010 struck a blow at Afghanistan’s banking system. From its inception, the National Unity Government made the resolution of the Kabul Bank crisis the centerpiece of its fight against corruption. This report updates the government’s progress in recovering stolen assets, charging individuals, and addressing the regulatory deficits that enabled the fraud, then provides recommendations for strengthening the regulatory and judicial climate in which banking operates.

About the Author

Grant McLeod is principal consultant at Global Development Advisors LLC, where he mainly focuses on governance, anticorruption, and the justice sector in Afghanistan. Formerly he was the senior policy and legal adviser for the Independent Joint Anti-Corruption Monitoring and Evaluation Committee, which monitors and evaluates anticorruption efforts in Afghanistan.

Related Publications

How the Taliban’s Hijab Decree Defies Islam

How the Taliban’s Hijab Decree Defies Islam

Thursday, May 12, 2022

By: Belquis Ahmadi;  Mohammad Osman Tariq

The Taliban continued this week to roll back Afghan women’s rights by decreeing women must be fully covered from head to toe — including their faces — to appear in public. This follows decrees limiting women’s ability to work, women’s and girls’ access to education and even limiting their freedom of movement. Afghan women are rapidly facing the worst-case scenario many feared when the Taliban took over last summer. While the Taliban justify these moves as in accordance with Islam, they are, in fact, contradicting Islamic tradition and Afghan culture as the group looks to resurrect the full control they had over women and girls when they ruled in the 1990s.

Type: Analysis and Commentary

GenderHuman RightsReligion

Why Religion-Based Support is Vital for Afghan Refugees

Why Religion-Based Support is Vital for Afghan Refugees

Tuesday, May 10, 2022

By: Andrés Martínez;  Carolina Buendia Sarmiento

The increasing violence and insecurity in Afghanistan could force over half a million more people to migrate from the country by the end of 2022, adding to the population of almost 2.6 million Afghan refugees worldwide. And for these millions of migrants, the plight of serious mental health challenges is a concern that we cannot afford to overlook.

Type: Blog


Pakistan’s Twin Taliban Problem

Pakistan’s Twin Taliban Problem

Wednesday, May 4, 2022

By: Asfandyar Mir, Ph.D.

Pakistan and the Afghan Taliban are teetering on the brink of a major crisis. Since coming into power, the Taliban has defied Pakistan — its main state benefactor during the insurgency against the United States military and the deposed Afghan government. It has done so by challenging the status of the Afghan-Pakistan border and providing a haven to the anti-Pakistan insurgent group the Tehreek-e-Taliban Pakistan (TTP), also known as the Pakistani Taliban, which has killed thousands of Pakistanis and seeks to establish a Taliban-style, Shariah-compliant state in Pakistan. This has stunned Islamabad, which was operating on the assumption that the Taliban would be beholden to Pakistan out of gratitude for years of support.

Type: Analysis and Commentary

Conflict Analysis & Prevention

Intolerance of Atrocity Crimes in Ukraine Should Apply to Afghanistan

Intolerance of Atrocity Crimes in Ukraine Should Apply to Afghanistan

Thursday, April 28, 2022

By: Belquis Ahmadi;  Kate Bateman;  Scott Worden

Russia’s war of aggression against Ukraine has caused massive loss of life and destruction of property, forcing millions to seek refuge in neighboring countries. There is mounting evidence that the Russian military has committed war crimes and crimes against humanity, intentionally attacking Ukrainian civilians. The urgent attention that Western countries have given to Russian war crimes and other atrocities in Ukraine has the potential to provide some accountability for gross violations of human rights as well as to shore up a faltering framework of international human rights law.

Type: Analysis and Commentary

Human RightsJustice, Security & Rule of LawGlobal Policy

View All Publications