Cash-Poor Bank Risks Closure

Thai shareholders in the Cam­bodia Farmers Bank have been ordered to give the bank a cash infusion or risk being closed down, National Bank of Cam­bodia officials said Monday.

NBC banking supervision de­partment General Director Tal Nay Im said the institution has been unable to pay depositors withdrawing from their accounts. The shareholders have been or­dered to inject cash into the bank but so far have not done so, Tal Nay Im said.

She could not give details on the number of depositors affected or amount of capital shareholders have been ordered to inject.

Officials at Cambodia Farmers Bank, on Kampuchea Krom Bou­levard, declined to comment on Friday. They refer­red all questions to central bank authorities. Cambodia Farmers has no connection to Thai Far­mers Bank.

NBC Deputy Governor Soum Nipha said Cambodia Farmers Bank’s problems stemmed from financial difficulties in Thailand.

The bank will not be closed im­mediately, she said, but she could not say how long shareholders will have  to rescue the branch.

Cambodia Farmers Bank opened in April 1992. One of its original shareholders was King Norodom Sihanouk’s daughter Princess Arunrasmey, but Suom Nipha said she believed the prin­cess had sold her shares.

The bank is just one of several here to fall victim to the Asian economic crisis. With parent operations saddled with debts from unpaid loans, unprofitable other branches are being closed.

The Thai-owned Siam City Bank announced earlier this month it will close its local branch on Nov 1, after more than six years of operation in Cambodia.

Suom Nipha said Indo­nesia’s LippoBank will downsize its branch on Ang Duong Boul­evard by the end of the year and leave only a company representative. LippoBank opened its Phnom Penh branch  in late 1997.

LippoBank depositors have not had problems withdrawing mo­ney, Suom Nipha said. The decision to downsize was based on the ongoing financial crisis in Indonesia and was made by the bank’s headquarters in Jakarta.

A Lippo official in Phnom Penh de­clined comment Monday.


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