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Dec 12 2008
Unofficial Translation
PRAKAS
on
New Capital Requirement and Criteria for Licensing Approval
Of Banks
The Governor of the National Bank of Cambodia
- With reference to the Constitution of the Kingdom of Cambodia;
- With reference to the Royal Kram NS/RKM/0196/27, dated January 26, 1996, promulgating the Law on the Organization and Conduct of the National Bank of Cambodia;
- With reference to the Royal Kram NS/RKM/1199/13 of November 18, 1999, promulgating the Law on Banking and Financial Institutions;
- With reference to the Royal Decree NS/RKT/0508/526 of May 13, 2008 on the reappointment of His Excellency Chea Chanto as Governor General of the National Bank of Cambodia, equivalent to Senior Minister;
- With reference to the Prakas B7-00-04 on the Licensing of Commercial Banks, dated January 10, 2000;
- With reference to the Prakas B7-00-05 on the Licensing of Rural Credit Specialized Banks, dated January 11, 2000;
- With reference to the Prakas B7-00-39 on Commercial Banks’ Minimum Capital, dated February 09, 2000;
- Pursuant to the recommendation made by National Bank of Cambodia management during the September 08, 2008, meeting.
DECIDES
Article 1.-
The purpose of this Prakas is to redefine the minimum registered capital and criteria for licensing approval of Banks. The NBC will assess the applicant’s capacity to achieve its development objectives in a manner that is compatible with the smooth working of the banking system and offers sufficient safety for its customers. Applications to obtain a bank license that do not meet with conditions set up in this Prakas shall be rejected in writing.
Article 2.-
The bank shall be managed by two persons with the necessary integrity, qualifications, and suitable banking experience.
Article 3.-
The shareholder or shareholders shall have proven experience in the activities that the bank intends to develop.
Article 4.-
Applicants shall prove that the bank to be established will be appropriately staffed in terms of number and skills. Technical resources, including information systems, must be efficient and reliable, particularly in regard to the security of operations with customers.
Article 5.-
Applicants must comply with requirements to set up an internal control system that enables the bank:
- to ensure that operations, organizational structures and procedures comply with the prevailing laws and regulations and business practice and standards;
- to ensure compliance with limits imposed with regard to risk, especially counterparty, interest-rate and exchange-rate risk; and
- to ensure the quality of financial and accounting reporting.
Article 6.-
The bank’s financial viability over a term of several years must be sufficiently established by means of business plans, market studies and financial simulations including, where appropriate, stress scenarios. The financial simulations must cover both the customary indicators used in financial analysis and prudential standards.
Article 7.-
Article 1 of the Prakas B7-00-39 dated February 09, 2000, on Commercial Banks’ Minimum Capital is “replaced by the following article:
“Commercial banks locally incorporated as companies which have at least one influential shareholder as a bank or financial institution with a rating “investment grade,” extended by a reputable rating agency, must have minimum capital equal to at least KHR 50,000,000,000 (fifty billion).
Commercial banks having shareholders as individuals or companies must have a minimum capital of at least KHR 150,000,000,000 (one hundred fifty billion).”
Article 8.-
Article 4 of the Prakas B7-00-05 dated January 11, 2000, on the Licensing of Rural Credit Specialized Banks is replaced by the following article:
“Specialized banks locally incorporated as companies which have at least one influential shareholder as a bank or financial institution with a rating “investment grade,” extended by a reputable rating agency must have minimum capital equal to at least KHR 10,000,000,000 (ten billion).
Specialized banks having shareholders as individuals or companies must have a minimum capital of at least KHR 30,000,000,000 (thirty billion).”
Article 9.-
Procedures and an additional series of criteria shall be defined in a separate Circular from the NBC.
Article 10.-
Banks, which obtained a license or principal letter before this Prakas is issued, shall increase their capital equal to the minimum capital as defined in Article 7 and Article 8 of this Prakas no later than the end of 2010.
Article 11.-
Article 12.-
cc: - All members of the Board of Directors
- The parties concerned as stated in Article 11
- File
- CM “for info”
- Administration Department of CM
“for publication in the National Gazette”
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