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Banking industry

Cambodia's Banking Sector Undergoes Major Overhaul

Strategic Insights

— 1 min read

The Cambodian National Bank has recently shut down 11 out of 31 commercial banks, citing the new minimum capital requirement of $13 million as the reason. While the bank has promised to ensure a smooth liquidation process, depositors of the closed banks are still awaiting news on when they will receive their money back. The new banking law, designed to improve the sector's health, has also led to changes in banking policies and practices, causing difficulties for some foreign banks operating in Cambodia.

Key Takeaways:

  • The Cambodian National Bank has closed 11 out of 31 commercial banks due to the new minimum capital requirement of $13 million.
  • The closed banks include the Agriculture and Commercial Bank, which has been complained about for not providing advance warning of its closure.
  • The central bank has issued new licenses to four banks and provisional licenses to 16 others, while liquidating the assets of the closed banks.
  • Tal Naiim, director-general of the central bank, attributed the closure of banks to the need for a healthy banking sector and adherence to international standards.
  • Thai Farmers Bank, which was not affected by the closure, has plans to close its Phnom Penh branch due to difficulties caused by constant policy changes.
  • The new banking law aims to improve the banking sector's health by following international standards and increasing the minimum capital requirement.

Statistics:

  • 11 commercial banks have been shut down due to the new minimum capital requirement.
  • 4 banks have been issued new licenses, while 16 others have been given provisional licenses.
  • 20 days have been demanded by clients of the Agriculture and Commercial Bank as the timeframe for the closed bank to repay clients.
  • $13 million is the new minimum capital requirement for commercial banks in Cambodia.

Sources:

  • XINHUA AGENCY, "Top National Bank official: liquidation of downed banks to be done by the law", Published: December 20 (no date specified in original text)
  • The Cambodia Daily, "Agriculture and Commercial Bank customers protest closure", Published: December 19 (no date specified in original text)
  • COMTEX (http://www.comtexnews.com), provider of news articles, including the XINHUA AGENCY article.

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