The Council of Ministers

State of Cambodia

No. 19 An. Kr

and at the request of the Governor of the National Bank of Cambodia;

It is hereby decided:



Article 1.

The People's National Bank of' Cambodia shall change its name to the National Bank of Cambodia called in short the National Bank, being a juridical person and having financial autonomy. The National Bank is the Bank of' the State shall have an equivalent rank as a Ministry and shall report to the Council of Ministers.

The National Bank shall he empowered to monitor the movement of the currency and the credit within the limits of the economic and financial policy of the nation.

Article 2:

The National Bank shall have the following functions:

Article 3:

The National Bank shall have its head office at 22-24 Tou Samouth Boulevard, Phnom Penh.

The National Bank may open branches and agencies throughout the country and may have agents and representatives overseas as deemed necessary by the Board of' Directors. The nomination of agents and overseas representatives shall he approved by the Council of Ministers.

Article 4:

The activities of the National Bank may only be terminated by the adoption of a Law.

Article 5:

Other Financial Institutions in Cambodia may not use in their names the words " National " State " or " Central " or other words reflecting the same meaning.



Article 6.

The authorized capital of the National Bank shall he five billion Riel and shall he held by the State. The capital can he increased or decreased according, to the decision of" the Board of Directors with the approval of the Government.

Article 7:

The reserves of' the bank are as follows: General reserves to offset any deficits and other reserves that the Board Directors shall determine, 25 percent of the annual net profits shall be added to the General Reserves.

The remaining profit after other reserve appropriations determined by the Board shall be paid to the budget. When the general reserves equals 100 percent of the capital the Board of Directors shall cease making further transfers.




Article 8:

The National Bank shall he administered by the Governor with the assistance of the Deputy Governor and the help of the Board Directors.

Article 9:

The Governor shall he appointed or dismissed by the National Assembly acting upon the recommendation of the Council of Ministers.

Article 10:

The National Bank shall carry out all the operations normally conducted by the Central Bank as follows:

  1. The printing, of' hank notes and the issues, managing and printing all other issues as approved by the Council of' Ministers.
  2. Manage the reserves stipulated in the Sub-Decree,
  3. Receive deposits, term deposits, and demand deposits not earning interest,
  4. Purchase, sell or discount bills of' exchange and promissory notes originating from commercial transactions, bearing, one or more creditworthy signatures one of' which shall be of any bank or financial institution which are not yet overdue,
  5. Purchase, sell or discount bills of' exchange and promissory notes originating from production or services transactions hearing the signatures of' creditworthy persons one of" which shall he of' representative of' any hank or any other financial institution and which are not yet overdue,
  6. Purchase from and sell to other banks foreign exchanges,
  7. Keep the money of' the Government and other hanks on account and repay on demand or after a term,
  8. Give loans against security:
    1. Government securities or government guaranteed papers where both interest and principal are guaranteed.
    2. Gold, silver or documents having a similar value
    3. Bills of exchange or promissory notes that may he purchased or received for discount as stipulated in 10.4 or 10.5 above.
    4. Promissory notes of' any hank evidencing a loan or overdraft having the underlying security at the bank.
    5. Bonds of' foreign governments with maturities not exceeding 6 months except in the case:
  1. Lend to Financial Institutions in the event these institutions face a crisis or financial difficulty that may adversely impact on the financial system. This lending, may be secured by shares of' the financial institutions and other companies or assets other than those listed in 8 above,
  2. Provide funds for the initial capitalization of' an insurance company that have been established by the Government and according to the terms and conditions set by the Board of' Directors,
  3. Provide unsecured loans or advances to the Government represented by the Ministry of Finance for approved annual budget expenditure in an amount not exceeding 25%, of the amount of' that expenditures to be repaid by the first quarter of the next fiscal year,
  4. Issue draft for payment at the head office and branches,
  5. Tender for purchase and safe of Government securities, government securities and securities of the international financial institutions of which Cambodia is a member, and special bonds issued by UN Agencies,
  6. Hold cash, securities and precious items,
  7. Buy and sell gold, silver and precious stones,
  8. Borrow to stabilize the currency by issuing, Central Bank Bonds and Government Bonds and other bills that are approved by the Council of Ministers, or borrow for the banking business, either in Riel or in foreign currency
  9. Manage the settlement system " Clearing House",
  10. Receive and disburse funds of the account of the Ministry of Finance, exchange and remit Government monies and conduct all other banking operations, and
  11. Act as the representative of the Government in the following matters:

a) Buy and sell of gold, silver and precious stones,

b) Buy, sell and transfer bills of exchange, securities and the share certificates,

c) Keep securities and share certificates in safe custody whether they he principals, dividends or interests,

      1. Manage and collect foreign exchanges, and
      2. Any other functions as decided by Government.

Article 11:

In accordance with Article 10 the National bank shall he prohibited from:

Article 12:

The National bank is at the headquarters of the state owned specialized banks consisting of commercial. agricultural, savings and development banks. It has the following departments:

1. Administration Department

2. Personnel department

3. Planing and computer Services Department

4. Accounting Department

5. Economic Research Department

6. Supervision Department

7. Financial institution development Fund

8.Issue Management department

9. Banking Department

10. Deposit and Bond Department

Article 13:

The Board of Directors under this Sub-Decree is comprised of the followings:

The Governor and the' Deputy Governor of the National Bank, and Representatives of other institutions appointed by the Council of Ministers, being, not less than five persons. The Chairman and the Deputy Chairman are respectively the Governor and the Deputy Governor of the National Bank.

Article 14:

The Board of Directors shall hold their meetings and gives decisions to the Governor of the National Bank on the followings:

Article 15:

The Governor of' the National Bank shall call a Board meeting each month. A quorum for a meeting of the Board shall he three/ fifths of the members including either the Governor or the Deputy Governor. Decisions shall he taken by a majority vote of' members present and voting, and in the event of a tie the Chairman shall have a casting vote.



Article 16:

The National Bank appoints the Issue Department which has the responsibility for issuing bank notes and managing their circulation.

Article 17:

The National Bank shall maintain the money supply and allocate appropriate level of' bank credit to the agricultural. industrial and commercial sectors within the economy, and to prevent and slowdown the inflationary trends that disrupt the national economic growth. especially through the allocation of credit to the general or selected sectors.

Article 18:

Bank notes issued by the National Bank are legal tender for the payment of' any amount and can circulate without restrictions within Cambodia.

Article 19:

Bank notes of the National Bank are considered to be the legal currency of Cambodia.



Article 20:

In this Sub-Decree:

1. "Financial Institutions " means Commercial Bank, Agricultural Bank, Savings Bank, Development Bank, Financial Company, Securities Company, Credit Foncier Company.

2." Fund " means Financial Institutions Development Fund. means the Fund manager.


Article 21:

The Fund Department is the juridical entity established to strengthen and stabilize the financial system.

Article 22:

The Fund consists of:

1. Money received from Financial Institutions

2. Donations of' money and properties

3. Other money and assets devolving to the fund

4. Earnings of the Fund

Article 23:

Financial Institutions shall contribute to the Fund at the rate stipulated by the Fund Management Committee and approved by the Council of' Ministers. The contribution rate shall not exceed 0.5 percent of' deposits and borrowings shown in the balance sheet at the end of the year.

Article 24:

Financial Institutions that fail to pay or that have not paid in full contribution to the Fund as stipulated in Article 23 shall pay, double the unpaid amount in default.

Article 25:

The National Bank shall review its reserves according to Article 7 and may make payment on time accordingly to the Fund when it deems suitable. The National Bank can make loans to the Fund when necessary and such loans shall he repaid within a specified term.

Article 26:

The Fund Department has right to carry out all the fo1lowing tasks:

    1. Hold ownership or possessory rights or any other rights related to building, acquisition, disposition, lease, lease-purchase under a lease-purchase agreement, pledge. mortgage or any other activities involving properties, including donated properties, inside or outside of' Cambodia.
    2. Lend money to Financial Institutions against reasonable security.
    3. Guarantee and guarantee to honor notes.
    4. Provide financial assistance to the depositors and creditors of a financial institution facing a serious crisis.
    5. Deposit money in any financial institutions when the Fund Committee deems it necessary.
    6. Buy shares or hold shares of' financial institutions.
    7. Discount and rediscount rotes representing claims on obligations or accept transfer of claims from financial institutions.
    8. Borrow with or without interest. issue hills and
    9. Invest for income with the approval of the Fund
    10. Other businesses involving the Fund.

Article 27:

There shall he a Committee called the Fund Management Committee consisting of the Governor of' the National Bank as Chairman. a Vice Minister of' Finance as Deputy Chairman, a representative of the Council of Ministers and other members appointed by the Council of Ministers. The Committee shall have not less than five members and not more than nine members and the Fund Department shall act as Secretary.

Article 28:

The members of the Committee shall serve for three years.

Article 29:

A quorum for a meeting, of the Fund Management Committee shall be more than half of it members. Decisions shall be taken by majority vote. The Chairman shall have a casting vote in case of a tie.

Article 30:

The Fund management shall have the power to set the policies and manage all other businesses of the Fund as follows:

1. Adopt procedures for the implementation of the articles 23. 24 and 26.

2. Adopt procedures for meetings and activities of the committee.

3. Adopt procedures relating, to the duties for the Manager of the Fund.

4. Arrange any other matters set by the National Bank.

Article 31:

Remuneration for the Fund Management Committee shall he set by the Council of' Ministers.

The Committee shall appoint and dismiss the Manager who shall he treated as an employee of the National Bank.

Article 32:

The assets of the Fund shall he used only to implement the objectives of the Fund, and to meet administrative expenses of the Fund including authorized remunerations.

Article 33:

The Fund shall have its proper accounting system, subject to internal audit of the accounts incomes and expenditures assets and liabilities

Article 34:

The State Audit shall audit the hooks and cash of the Fund each year. The Auditor shall make a full audit report to the Council of Ministers and to the National Bank of Cambodia within ninety days after the financial year end.



Article 35:

The National Bank of Cambodia shall keep the deposits of the Ministry of Finances and allow the Ministry to withdraw its money but not in excess of the balance thereon.

The Ministry of Finances shall not pay any fee in respect of its deposits. The National Bank shall not pay deposit interests to the Ministry of Finances.



Article 36:

All Banks shall maintain a prudential reserve of not less than 5 percent and not more than 15 percent of their capital on non-interest earning deposit with the National Bank of Cambodia.

This money can he withdrawn when the bank legally ceases its business. In addition to these deposits the commercial banks shall maintain at the National Bank:

1. In normal cases between 5 percent to 50 percent of' their demand deposit liabilities and 3 percent to 30 percent of their fixed deposit liabilities.

2. In special circumstances 3 percent to 30 percent of their demand deposit liabilities and 2 percent to 20 percent of their fixed deposit liabilities.

The Governor of' the National Bank shall decide the special circumstances of each commercial banks. The term " liability " in this Article shall exclude borrowings from the National Bank.

Article 37:

For the implementation of Article 36, the National Bank has the right to require all banks to submit confidential reports to the National Bank as follows:

  1. The amount of demand and fixed deposit liabilities
  2. The amount of cash in Riels and the Riel equivalent of foreign currency notes held by the bank.
  3. Details of each denomination of notes held.
  4. The amount of loans made and bills discounted.
  5. The amount on deposit at the National Bank.
  6. The amount on deposit at the National Bank.
  7. Other information required by the National Bank.

Article 38:

The Governor of the National Bank shall implement the Law and shall manage the bank operations and has the right to revoke the license of' any financial institution that fails to observe the above Articles in accordance with the requirements of the Board of Directors, and shall report thereon to the Council of Ministers.



Article 39:

The Board of Directors shall propose the appointment of one or more auditors each-year to the Council of Ministers for approval. The first auditor shall work until the completion of the financial year and prepare the balance sheet and profit and loss account as stipulated in

Article 45.

The Board of Directors may renew the appointment of the auditor at the end of the mandate.

The auditor shall not he an employee of' the National Bank or a member of the Board of Directors. In the event the position of auditor becomes vacant during the year the Board may appoint a new auditor automatically to fill the vacancy for the remaining mandate.

Article 40:

The auditor shall examine the regularity and thoroughness of' the balance sheet against inventories in accordance with the banking accounting system.

Article 41:

The auditor may advise the Governor and the Board of Directors on all matters involving the rate of exchange, the discount rate, credit interest rate and the purchase of securities.

Article 42:

The auditor whilst carrying out his duties shall audit the books of accounts and other records of the National Bank and may require from employees explanations as deem necessary.



Article 43:

The fiscal year of the National Bank shall he from the First of January until December 31 of each year.

Article 44:

The National Bank shall submit a weekly standard report of the Issue Department and Banking Department to the Council of Ministers.

Article 45:

Within three months of' the end of' the fiscal year, the National Bank shall submit to the and Council of the Ministers the Balance Sheet, Profit and Loss Statement dated December 31of the previous years, hearing the signatures of the Governor, Deputy Governor, the

Accountant with the confirmation of the auditor together with the Annual Report of the Board of Directors.

Article 46:

The National Bank shall not pay income tax, surtax, profit tax, turnover tax and / or stamp duty according to the Fiscal Law.




Article 47:

Any regulations that contradict this Sub-Decree shall he null and void.

Article 48:

The Minister of' the Cabinet of' the Council of' Ministers and the Governor of' the National

Bank of Cambodia, other Ministers. Directors of Institutions. the Heads of the Provincial Committees, the Municipality of Phnom Penh shall implement this Sub-Decree according to their respective duties.

Article 49:

This Sub- Decree takes effect from the date of its publication.


For the Council of' Ministers

Deputy Prime Minister

Signature and seal

Say Chhum