Afghanistan's central bank has taken control of the troubled Kabul Bank.
Governor Abdul Qadir Fitrat said investigations had also been started into the dealings of the bank's top two directors and shareholders.
Customers have been withdrawing money from the bank amid fears it may collapse following reports of corruption and mismanagement.
Earlier this month, Mr Fitrat said Kabul Bank was "safe and sound". He also denied the central bank had stepped in, saying "the media exaggerated the matter".
The BBC reports President Karzai's brother Mahmoud Karzai is one of the bank's largest shareholders.
Kabul Bank is responsible for paying the salaries of 250,000 government workers.
The New York Times and The Wall Street Journal have reported that the bank has debts of about $US300 million.
Last week, the central bank froze the assets of key shareholders, including the ex-chairman and chief executive.