Afghanistan’s acting central bank governor said yesterday the country’s second-biggest private bank was not in crisis and warned lawmakers that raising fears about its future could spark panic. Mohebullah Safi appeared before parliament at the request of lawmakers, some of whom suggested this week that Azizi Bank was facing the same fate as the country’s biggest private bank, Kabulbank, which collapsed earlier this year. Kabulbank has around $926mn of outstanding loans, and Western officials in Kabul now openly refer to it as a Ponzi scheme. Safi told parliament that Azizi Bank “wasn’t in a crisis situation before, and isn’t now.” He added that the bank had $588mn in reserves which were safe. “I need your cooperation regarding Azizi Bank,” Safi said. “We all know that many Afghans are illiterate and have accounts in banks and we shouldn’t panic them, which could damage our national interest.” The troubles at Kabulbank, at the time Afghanistan’s biggest private bank, sparked a run on branches around the country earlier this year as customers rushed to retrieve savings they feared were at risk of vanishing. There have been no signs of similar disorder at Azizi Bank branches. A spokesman for Azizi Bank said on Monday that speculation the bank was in trouble was “absolutely false” and that its liquidity “is very strong”. Safi also asked parliament to amend the country’s banking laws to allow the central bank to monitor investments made by Afghan banks and their shareholders both at home and abroad. “Based on banking laws, we can only monitor the banks themselves, but we can’t monitor their other related businesses and shareholders,” said Safi. Kabulbank doled out nearly half a billion dollars in unsecured, undocumented loans to a roster of Kabul’s elite, including cabinet ministers and a powerful former warlord, anti-corruption officials have said. The collapse led the IMF to withhold tens of millions of dollars in aid and may jeopardise projects worth billions. Afghan officials say about $347mn will be recovered, but donors want more aggressive asset recovery. Several people, including the bank’s former top two shareholders, have been arrested in relation to the scandal. Former Central Bank Governor Abdul Qadir Fitrat fled to the US last month and resigned from his post fearing for his life following his role in investigating the scandal. The International Monetary Fund and the Afghan government are at loggerheads over how to wind up Kabulbank, recover lost assets and how to strengthen Afghanistan’s financial sector to prevent such a scandal from happening again. The IMF also wants an audit of Azizi Bank, as part of those measures, a request that the Azizi Bank spokesman said it would comply with as long as it came from the central bank.