Bank officials are pointing to a large increase in local and foreign deposits and loans at Cambodian financial institutions as a sign of confidence in the country’s banking system.
During the signing ceremony between Royal Group of Companies and Australian-owned ANZ Bank last week, National Bank of Cambodia governor Chea Chanto announced significant increases in banking activity through the first eight months of the year.
“People use more and more banks,” Chea Chanto said. “There are fantastic possibilities to develop all the banks.”
He said deposits into the country’s banks had increased by 22 percent as compared to the same period last year while loans were up 19 percent. This follows the trend from last year which saw deposits increase by 16 percent while the value of loans increased by 30 percent.
Chea Chanto reiterated the need for a strong banking system in the country to help combat poverty and help with development.
“From day to day, the National Bank of Cambodia works to strengthen the banking system,” he said.
Chea Chanto said banks can improve the system by offering dynamic institutions that have good products and services and by preventing banking crises.
He said existing government regulations are not intended to hamper the development of banks but to give the same clear rules for all players.
Tal Nay Im, director-general for the NBC, said since the Banking Law was adopted in 2002,
11 banks have closed their doors because they were not able to meet the $13 million capital investment requirement.
Tal Nay Im said ANZ ‘s agreement will likely spur more interest in the country for other banks.
“I think that the new bank is a good sign to attract other banking investors to Cambodia,” he said.
A reliable source at NBC said that since 2002, no commercial bank in the country has faced bankruptcy or a cash shortage.
“Up to now, the bank sector is healthy,” he said.