Cambodian banks brace for end of bad loan relief program

Policy was brought in to avoid widespread defaults in face of COVID.

Cambodian lenders are bracing for the end of a deferment and restructuring program for loans that was introduced during the pandemic to avoid an economic crisis.

The National Bank of Cambodia (NBC) has given banks and microfinance institutions (MFIs) until the end of February to assess how many of the loans restructured as part of COVID relief measures should be classified as bad debt and provision appropriately, according to an NBC circular dated Jan. 12 and obtained by Nikkei Asia.

The deadline, originally set for the end of January, was extended by one month after an appeal by the Association of Banks in Cambodia, a lobby group for the industry. The extra time fell short of the six-month extension requested by the ABC.

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