1. Banking Sector in Cambodia
National Bank of Cambodia
Banking Sector in Cambodia

2. National Bank of Cambodia
1- Overview
Cambodian’s financial sector is at a rudimentary stage
Limited financial intermediation and low public confidence
Before 1989, Cambodia had a monobanking system which National Bank acted as central and commercial
From 1989, Government decree to separate the function of commercial banks from NBC (two-tier banking system)
2019/1/17
National Bank of Cambodia

3. 2- Banking System Reform
In November 2000, to strengthen the Banking System, NBC conducted relicensing program
This program required minimum capital requirement 13 million USD for each commercial banks
Every commercial bank is subjected to be examined by Banking Supervision Department (off-site and on-site) based on CAMELS rating system
2019/1/17
National Bank of Cambodia

4. National Bank of Cambodia
3- Banking Structure
Before relicensing program, commercial banking system consist of 31 banks, including :
2 Government-owned banks
22 locally incorporated banks
7 foreign branches bank
2019/1/17
National Bank of Cambodia

5. National Bank of Cambodia
3- Banking Structure
After relicensing program until present, commercial banking system consist of 17banks, including
1 state owned bank
10 locally incorporated banks
3 foreign branches bank
3 specialized bank
Micro Finance Institutions : 10 Licensed MFIs and 30 registered NGO-MFIs
2019/1/17
National Bank of Cambodia

6. 4- Constraints and Issues
High liquidity problem
High interest spread between loan and deposit (deposit interest rate 1 to 4% p.a and loan interest rate 12 to 20%p.a)
Limitation of banking products and services
Poor asset quality (NPL=10.39% as at 31 March 2005)
High risk and operating cost
2019/1/17
National Bank of Cambodia

7. 4- Constraints and Issues
Lack of reliable borrower information
Collateral based lending
Ineffective of legal infrastructure
Weak supervisory capacity and regulatory framework
Inconsistent adopting of Accounting Standard
2019/1/17
National Bank of Cambodia

8. 5- Solution and progress
Strengthen and amend some regulations to facilitate commercial banks and supervisory benefit
Introduce Risk Management System to commercial banks
All commercial banks are required to adopt Cambodian Accounting Standard and Standard Chart of Account.
Strengthening supervisors’ capacity (off-site and on-site)
2019/1/17
National Bank of Cambodia

9. 5- Solution and progress
On-site staffs conduct on-site inspection on every commercial banks annually.
The banking system is more soundness and healthy after the period of restructure
As a result, public increase their trust on banking sector and participate actively in banking system.
2019/1/17
National Bank of Cambodia