KABUL: Afghanistan is in talks with the International Monetary Fund (IMF) on a new plan to privatise its loss-making New Kabul Bank after two prior attempts failed to find a suitable buyer, the treasury chief told Reuters on Thursday.

The original Kabul Bank, used to pay government salaries, collapsed in 2010 with debts of almost $1 billion, triggering a financial crisis.

The banking sector has yet to recover from the blow and the government has struggled to find a buyer for the new state-run institution.

A decision was expected after meetings between IMF officials and the new Afghan finance minister in Dubai, treasury chief Alhaj Mohammad Aqa said.

“Tomorrow we will finalise an agreement,” he told Reuters.

The troubled New Kabul Bank has lost around $56 million over the past four years, according to Aqa, because of strict rules on its lending and investment.

Authorities initially planned to merge three public banks, Aqa told Reuters this week, listing the candidates as Pashtany Bank, the Bank-e-Millie and New Kabul Bank.

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