By Yuko Maeda
The National Bank of Cambodia has appointed independent auditors to administer and liquidate 11 recently closed banks, moving ahead the long-awaited liquidation process, a senior central bank official said.
But bank clients still do not know if or when their deposits will be returned.
Phan Ho, director of the central bank’s supervisory department, said six of the 11 banks closed in December are already in the liquidation process and the other five, including the complaint-plagued Agriculture and Commercial Bank, will start the process by the end of this month.
Many bank customers have said they cannot withdraw their money from some of the closed banks. The appointment of liquidators will put the burden of dealing with individual commercial disputes on the appointed auditors’ shoulders.
“We’re a supervisory authority. From now on all problems with customers have to be solved by auditors at each commercial bank,” Phan Ho said.
The 11 banks closed in December after failing to meet tougher licensing regulations required by the new banking law. The major stipulation of the law is that banks must increase their capital from $5 million to $13 million. Among the 11 banks, three banks were forced to close while the others were either inactive for a few years or voluntarily ceased their banking operations here.
According to the law, an independent administrator and liquidator must be appointed within three months after closure.
The National Bank was able to push through tough last-minute negotiations with auditing firms that Phan Ho said were asking for too much money for the liquidation jobs. The costs must be covered by each commercial bank and paid prior to customer payouts, the law states.
Phan Ho said all the appointed liquidators are internationally recognized independent accounting firms.
The Agriculture and Commercial Bank, which has been hit by the most complaints from customers, will be administered by the well-known US accounting firm Arthur Anderson. Phan Ho said a French auditor from the Arthur Anderson will fly into Cambodia soon.
KAK & Associates, local partner of Morison International, is currently administering Angkor Bank and Global Commercial Bank, said KAK’s managing partner Meas Saksom. “The liquidation process has already started,” he said. “It’s been going smoothly.”
Senaka Fernando, country manager of PriceWaterhouseCooper, said his firm had intended to administer and liquidate three unidentified banks, but no official appointments have come yet.
According to the law, administrators are allowed to take as long as three months to audit the assets and liability of commercial banks. A liquidator will then sell assets, collect loans from clients and pay deposits back to customers. No time limit is stated for actual liquidation in the law.
Chea Dara, member of the Depositors Rights Protection Committee formed by clients of the Agriculture and Commercial, was not impressed by the central bank’s appointment.
“The important thing for us is that many NGOs who deposited their money in the Agriculture and Commercial are short of money,” he said, adding that the committee members alone represent about 300 of 2,400 accounts held by the bank, totaling more than $1 million in deposits. “They have no more money to operate their programs.”
With the central bank’s facilitation, the committee members will likely borrow nearly $500,000 from the state-run Foreign Trade Bank with lower interests, he said.