This is the remarkable story of how Agha Abedi built BCCI, a global bank founded in Pakistan that was revered by its ordinary customers and employees. Abedi was seen as more than just a banker — a visionary and philanthropist. But there was a second bank within the bank called the Dark Network, and this secret side of the bank provided special services for corrupt politicians, funded wars, washed Pablo Escobar’s drug money, facilitated the murky dealings of MI6, the CIA, among others, and then it all came crashing down from an undercover operation straight out of the movies. It’s a fascinating story — enjoy.
Agha Hasan Abedi was born in 1922 in Lucknow, in northern India. His father was a courtier — someone who controlled access to one of the great feudal rulers of the region. He decided who got an audience. He made himself indispensable. And as a boy, Abedi absorbed all of that: who controls wealth, who gets access to it, and the realisation that if you make yourself indispensable to the person at the top, you effectively command their wealth without ever owning it.
In 1946, Abedi joined the Habib Bank in Bombay. Now, the Habib family were basically the Rockefellers of the Muslim world — a vast trading and banking empire. And Abedi, as a young graduate trainee, immediately stood apart and quickly began bringing in some of the wealthiest families — clients who had previously been banking with established rivals. He had this view that banking was, as he put it himself, "the marketing of human needs and satisfaction." Not the sale of financial products. Human needs — that’s how he understood banking, and indeed that was his world view.
Then came Partition in 1947, the division of British India into India and Pakistan. The Habib family moved their headquarters from Bombay to Karachi. Abedi moved with them. But he felt stifled. It was a conservative, family-controlled institution, and he had a vision for a different type of bank. So in 1958 he resigned, took his key clients with him, and used their backing to open a new bank: United Bank Limited, in Karachi.
And what he did with UBL was genuinely disruptive. In 1950s Pakistan, banking was an exclusive club for the landed gentry and big industrialists. Abedi sent salespeople door-to-door to shopkeepers and ordinary families, getting savings out from under mattresses. He introduced evening banking, IBM computers when competitors were still on handwritten ledgers. He wanted UBL to feel like a Swiss or American bank.
Abedi then spent years building relationships with the leaders of the various Gulf states, particularly Sheikh Zayed, the ruler of Abu Dhabi and the man who would go on to found the United Arab Emirates. So by the time the UAE was formally created in 1971, Abedi was one of Zayed's most trusted financial advisers.
By this stage UBL was the second-largest bank in Pakistan with over 600 branches across the region.
But then in 1971, it was all taken away from Abedi. Civil war broke out in Pakistan. East Pakistan broke away and became Bangladesh, and UBL's operations there were nationalised. Then, just weeks later, a new Pakistani government nationalised the rest of the UBL. The bank Abedi had spent more than a decade building was simply gone. And in early 1972, Abedi himself was placed under house arrest — the new government blaming powerful banking families for the country's economic problems.
After three months of house arrest, he was released, moved to Abu Dhabi, and in September 1972 he founded the Bank of Credit and Commerce International — BCCI. Sheikh Zayed, the UAE leader, backed it. Bank of America took a 25 percent equity stake, which gave the bank credibility with regulators and customers. The bank was registered in Luxembourg, where oversight was minimal at the time. A separate entity was later structured through the Cayman Islands while its headquarters was in Karachi. In effect, no single regulator could see the full picture.
By the end of 1973, BCCI had 19 branches across five countries and around $200 million in assets. The growth came from two areas: the huge growth in UAE oil wealth and the Pakistani migrant workers who were building the Gulf.
In 1975, Abedi began what was basically a diplomatic campaign across Africa and the Middle East. He visited countries that Western banks largely avoided — Sudan, Egypt, Kenya — places considered too risky, too unstable. His pitch was simple: we'll lend to you when others won't. But in return, those governments would give very valuable financial business to BCCI. For example, in Sudan, the bank effectively controlled the cotton and coffee export pipeline, taking a commission off every deal before the money reached the Sudanese treasury.
And of course Abedi secured these arrangements not through better loan terms but through direct bribery — cash payments, offshore accounts, Paris shopping trips for politicians' wives, flying doctors airlifted across the world to treat the family members of these corrupt politicians and officials.
And to manage all of this, Abedi built what became known as the Black Network — now, to clarify, Abedi didn’t name it that — it was US investigators and journalists.
It was a tightly controlled operational group that eventually grew to around 1,500 employees, scattered across key BCCI offices worldwide. These weren't ordinary bankers. Many were former intelligence officers — particularly from Pakistan's ISI — with experience in surveillance, covert operations, and political negotiation. The Black Network was, in effect, a private and very secret intelligence service within the bank.
So to give you an idea of some of the stuff the Black Network handled, outside of your bog-standard political corruption, they facilitated the funnelling of billions of dollars to the Mujahideen fighting the Soviets in Afghanistan, handling everything from weapon purchases to payments to the rebel commanders.
The Black Network helped MI6 maintain a slush fund in the Gulf which was used to pay off informants, fund localised coups, and buy influence without leaving a paper trail back to the British government.
It acted as the middleman for the global arms trade, facilitating deals for guys like Adnan Khashoggi — who I did an episode on — because the bank provided letters of credit that allowed "grey market" weapons — everything from missiles to nuclear components — to move across borders.
And what happened if a borrower in one of these sensitive deals refused to repay…
well, BCCI didn’t operate like a normal bank, so loan defaults were rarely handled through courts.
They were handled quietly.
So a defaulting borrower might receive what could be described as a “social visit” — not from bankers, but from senior security officials or well-connected government figures who would remind the borrower that their family’s safety — or their own political or business future — depended on the loan being "serviced".
So in cases where the money didn't make its way back to the bank, the "problem" was solved by, for example, the debtor granting the bank a new monopoly, a corrupt government contract, or a "favour" that the Black Network could then leverage.
The bank was structured so that all managers reported directly to Abedi or his CEO, Swaleh Naqvi. Employees, and most senior managers, didn’t have a full picture of how the bank was operating.
And because the bank operated across dozens of jurisdictions, and also because Abedi kept a second set of books hidden in the Karachi headquarters, the transactions were incredibly difficult to trace.
By the end of 1977, the bank had 135 branches in 32 countries and $2.8 billion in total assets — all of this achieved within five years.
So at this point Abedi was 55 years old and at the absolute height of his powers. He was married with a young daughter. But by all accounts his life was the bank.
He spent most of his time on his private Falcon jet, always on the move — meeting with kings, presidents, heads of state across Asia, Africa, the Gulf. Twenty-hour days.
And he didn't sound like a banker. He spoke in philosophical terms about the soul of the bank, about human destiny. He had this intense eye contact and a voice so quiet you had to lean in to hear him.
Inside BCCI, the reverence for him bordered on the religious. He held these large internal gatherings that felt less like business meetings and more like revival services.
And to many in Asia and Africa, he was seen as a hero. The man who had finally broken the Western monopoly on finance. And what also set him apart is that Abedi framed himself and BCCI as much more than just a bank — it was a force of good, because Abedi made philanthropy a central part of the bank’s identity.
In Pakistan in particular, but also in every country BCCI entered, the bank would establish foundations, fund hospitals, build schools, support universities, provide scholarships — often stepping into areas where the state simply wasn’t delivering.
And this wasn’t small-scale giving: they built healthcare systems, research centres, education programmes — many of which are still operating today.
So Abedi was seen as this amazing benefactor. Someone who was using finance to improve lives. But of course the hypocrisy here is that Abedi was also helping the politicians and officials move money out of the country — money that should have been used to build the services that he was then taking credit for, while also profiting from the corruption.
So we’re in the late 1970s and Abedi is eyeing up the United States, but he knows that if he wants to open up BCCI branches in the States, the US regulators would want to take a good look at the entire organisation, and there was no way he was going to let them look under the bonnet.
So his plan was to buy a bank while keeping BCCI’s involvement totally secret.
To do that, he assembled a group of nominees — around fifteen in total — wealthy businesspeople, including members of the ruling families of Abu Dhabi and Saudi Arabia.
They signed the documents stating they were investing their own personal wealth. In reality, BCCI was providing 100% of the money in secret. They were investors in name only.
But he also needed a front man. And for that, he found arguably the most perfectly credentialed person in Washington. Clark Clifford — I mean, even the name itself screams Washington insider, like you’re never going to meet a drug dealer called Clark Clifford.
Clifford was a lawyer who had served as a trusted confidant to Presidents Truman, Kennedy, and Johnson — he actually served as Secretary of Defence under Johnson.
Their first attempt to acquire a large Washington bank called Financial General Bankshares was blocked in 1978. But they got it over the line in 1981. The bank was renamed First American, with Clifford as chairman.
But there was obviously plenty of suspicion around BCCI’s involvement in this deal because at one of the hearings before the acquisition was approved, the Federal Reserve asked Clifford directly — is BCCI providing the money or the management? And Clifford gave them his personal word that BCCI had no role in ownership or management whatsoever.
Now Clifford had always maintained that he had no idea that BCCI were involved, but I think there are huge question marks over that, especially when you take into account that BCCI had secretly lent Clifford and his business partner $18 million to buy their own shares in First American. Shares they later sold for a profit of around $12 million.
Now while all of this was going on, Bank of America — which, remember, had initially taken a 25% stake in BCCI — quietly sold out of BCCI.
Their executives had grown very uncomfortable with the bank’s opaque structure, with its refusal to adopt standard accounting practices — they simply couldn’t get visibility into what was going on.
By 1982, BCCI had nearly 7,000 employees, 284 branches across 57 countries, and $9.6 billion in total assets.
But with a bank built on such endemic corruption, you just know it’s only a matter of time before the foundations on which it’s built start to crumble, and while BCCI’s downfall and implosion was always really inevitable, I suppose there are two key accounts that you could point to at this time where you could say, well, this was the start of the bank’s downfall:
The first one was the Gokal brothers. They were three brothers, Pakistani shipping magnates who built a massive, sprawling empire called Gulf Group.
And Abedi was very close to them, because he believed they represented the new face of Pakistani business — ambitious, global — just like him.
So to him they weren’t just clients, they were allies, brothers in arms, if you will.
But their business was built on huge amounts of debt.
So when the shipping market turned in the late 1970s and early 80s — hit by the oil crisis, a global slowdown — shipping freight rates collapsed.
And they owed BCCI about $1.2 billion — and BCCI simply wasn’t big enough to absorb that kind of loss, because the bank only had about $400 million in capital.
Now, that in itself isn’t unusual — banks only hold a small cushion relative to the assets they manage.
But the standard practice within normal banks is to limit any single loan to a small percentage of that capital — so one failure doesn’t bring the whole thing down.
BCCI lent the Gokals roughly three times its entire capital base… which meant when that loan went bad, it wiped out its safety net several times over.
And of course Abedi being Abedi, he wasn’t going to come clean.
He hid it. So to plug the enormous hole left by the Gokal brothers, they needed bigger flows of cash.
And that meant taking on even riskier clients.
Enter, stage right, the second toxic account or relationship.
General Noriega of Panama.
BCCI started effectively funding the dictator’s personal and political operations without real limits.
And in return, Noriega gave BCCI huge control over Panama’s financial system and, as a result, Panama became a global hub for offshore money and also became the key gateway for drug cash.
Money from the Medellín cartel, headed by Pablo Escobar, was flowing through BCCI.
Literally bags of cash.
No documentation.
And this drug money provided the immediate liquidity the bank desperately needed to pay the interest on the massive $1.2 billion Gokal debt.
Now it's easy to look at this and say Noriega and BCCI were the bad guys — and they were, no question. But several arms of the US government, and other intelligence agencies, were well aware of what was going on and chose to look the other way. Because Noriega was useful. Since the 1960s, he'd been feeding the CIA intelligence on communist movements in Central America and the activities of Castro in Cuba. And through the 1980s he was a key player in Iran-Contra, helping the US funnel support to the Contra rebels in Nicaragua. So for a long time, the relationship suited everyone involved. So turning a blind eye suited a lot of very powerful and secretive people.
And the corruption and shadiness going on here — it just gets worse.
We’re in 1984 now, and Abedi sends a BCCI executive to London to set up what looked, to any outsider, like an independent trading company called Capcom.
But in reality, it was owned and funded by BCCI.
And no surprise then that Capcom quickly became one of the main brokers used by the bank’s Treasury operation.
Within months, it was reporting trading volumes in the hundreds of millions — but it was all a fraud.
Now this is how it worked.
BCCI would trade with Capcom… and Capcom would trade straight back with BCCI.
The same money, the same positions, moving in circles.
But by setting one price to sell and a slightly different one to buy back, they could create the appearance of profits on paper while inflating trading volumes.
And because Capcom appeared “independent”, BCCI could pay it large commissions on those trades — moving real cash out of the bank’s regulated accounts into a private pool that could be used to cover losses and keep the whole system running.
But the losses just kept piling up because BCCI’s Treasury department had built up large, leveraged positions in gold and US government bonds.
And when the market moved the wrong way — with the US dollar strengthening and interest rates staying high — those positions started to lose money.
By early 1985, the losses from those were about $1 billion.
So let’s just take a step back… a bit of a breather… to look at what was going on at BCCI by this stage.
They’re facilitating some of the most corrupt governments in the world, they have a bank within a bank — the Black Network — working with these political elites as well as with intelligence agencies in the US, the UK, and plenty of other countries, they’re facilitating arms deals, moving money for warlords, and handling huge flows of drug money for the world’s largest cocaine cartels.
And for good measure, it’s the bank of choice for one of the world’s most wanted terrorists — Abu Nidal — he’d split from Fatah, the dominant Palestinian political and militant organisation at the time, and set up his own militant organisation — a group responsible for attacks across Europe and the Middle East in the 1980s, resulting in the death and injury of over 900 people, including the Rome and Vienna airport attacks.
Investigators later found he held tens of millions of dollars in accounts at BCCI’s London branch.
These are just the headlines — there's a tonne of other shady stuff going on — so suspicions were being raised. For example, in 1982 one internal memo from the UK regulator described BCCI as "on its way to becoming the financial equivalent of the Titanic!".
But through a combination of the reverence in which he was held inside the bank, the fact that most employees (but not all) had no idea about the whole Black Network, and of course because the bank was intimately involved in helping very powerful organisations within governments around the world, Abedi managed to keep a lid on it for now.
And what about the bank's auditors — Price Waterhouse? Isn’t there a long history of auditors exposing the wrongdoings of the companies that pay them tens of millions to audit their books and tell the truth? Yeah, right.
Well, let's see how Price Waterhouse measure up. We're in 1985 now and BCCI has suffered the $1 billion loss from poor trades, they are still nursing the Gokal brothers' losses — it's too much to hide, and so Price Waterhouse uncovers, finally you could say, about $1.3 billion in loans and deposits that just don’t make sense.
They confronted Naqvi, the CEO.
And his response: He produced letters from Middle Eastern investors, supposedly guaranteeing the bad loans — but these weren’t hard, enforceable guarantees. In effect, saying — don’t worry, the money is covered.
So Price Waterhouse had a choice.
Report what they had found… and risk triggering a global banking collapse, as they would probably have argued. And maybe also risk exposing faults in their own systems and also lose a very valuable account.
Or the second option, the one they decided to go with — work with the bank to contain it, as they might frame it — in reality, a straight-up cover-up.
So with the cover-up in place, on the face of it, everything looked great. In 1985 the bank reported assets of $16 billion, $90 million in profit — BCCI became one of the first foreign banks to operate in China.
But the chain reaction that started with the Gokal loans — and pushed BCCI into business with the Medellín cartel — eventually came back to bite them in the ass and ultimately set in motion the bank’s downfall.
It started in 1986 with a US Customs agent named Robert Mazur. He created a fake persona — a high-rolling Italian-American money launderer for the Medellín Cartel. And to make it believable, he really lived it. Private jet, luxury cars, expensive suits. He started small, moving drug cash through local Florida banks. Eventually his cartel contacts introduced him to the people running BCCI’s Black Network, and for the first time, an outsider was seeing the Black Network's methods in action.
By 1988, after two years of undercover work, Mazur had enough evidence. So to get all his high-level targets in one place, he organised a fake wedding in Tampa. He invited his cartel associates and his BCCI contacts from London and Miami. There was a lavish bachelor party the night before. And then on October 8th, the guests were taken in limousines supposedly to the wedding venue. But instead, they were driven straight into a line of armed federal agents. Nine BCCI executives were led away in handcuffs, still dressed in their tuxedos.
And if this all sounds like a movie — well, it actually was made into a movie in 2016 called The Infiltrator with Bryan Cranston playing Robert Mazur.
The bank eventually pleaded guilty to money laundering in 1990 and paid a $14.8 million fine. But what really mattered here, the arrested BCCI officials, by now called The Tampa Nine, began cooperating with Senate investigators and the New York DA.
They revealed everything — and as a result the political cover Abedi had built just evaporated.
Now Abedi himself was out of the picture by this stage — he’d suffered a massive heart attack in 1988 and by early 1989 was partially paralysed and could no longer run the bank.
By 1991, a Price Waterhouse investigation confirmed what US investigators had been piecing together: the bank was a multi-billion-dollar fraud that had been technically insolvent for years.
On July 5th, 1991, regulators in seven countries moved simultaneously.
Branches were raided and locked.
Over a million depositors found their savings frozen overnight.
14,000 employees lost their jobs.
Depositors eventually recovered some of their money through long legal processes, but many — especially smaller customers — took significant losses or waited years to be repaid.
And while a number of senior executives and associates were investigated and charged across multiple jurisdictions, relatively few served meaningful prison time.
Abedi never faced justice.
Pakistan refused extradition, citing his health, and he lived quietly in Karachi.
A UAE court convicted him in absentia in 1994.
He never served a day.
In August 1995, he died of a heart attack at 73.
In Pakistan, the tributes described him as a social entrepreneur, a national hero, and he continues to be revered there to this day. In 2015 he was posthumously awarded one of Pakistan's highest civilian honours. In 2022, the centenary of his birth sparked a fresh wave of tributes — podcasts, ceremonies, celebrations portraying him as a hero.
Some see him as a scapegoat. Others point to his philanthropy, or argue he was simply a threat to the dominance of Western banks. And that if he had been a Westerner then he would have been treated differently.
And look, I’m not going to even try to defend Western banks — they have plenty of their own scandals that I’ll definitely be covering.
But the whataboutery doesn't really hold up. BCCI, as a result of the secondary bank run by the Black Network, was rotten to the core and Abedi had enormous control over it. He facilitated corruption on a massive scale. And the philanthropy argument, for the most part, doesn’t hold up to scrutiny — because he was helping politicians enrich themselves at the exact same time those politicians were failing to deliver the basic services he was then swooping in to fund. That's not generosity. That's a man helping to rot the system from the inside, and then positioning himself as the one riding to the rescue.
And until countries actually face up to corruption, call it out without trying to deflect and blame others, then it’s just going to continue. Anyway, rant over, the BCCI scandal makes for a fascinating story, and that brings us to listeners' emails, and this one comes from Mel who’d love to hear the story of Bill Ackman, the high-profile and pretty controversial venture capitalist — and that is a great suggestion, Mel. I already have an episode on Ackman’s Herbalife trade — it’s from last year — but yeah, I’m going to do a 2- or 3-parter on Ackman because, love him or loathe him, he’s an interesting character, so thanks for the suggestion, Mel, and for listening. And remember, if you have any comments, any corrections, or any story you'd like us to cover, email us at: info@gbspod.com
All the best, folks