REGULATION DATED MAY 22, 1995
ON THE RISK COVER RATIO (CAPITAL ADEQUACY)
The Governor of the National Bank
- Having seen the Constitution of Kingdom of Cambodia;
- Having seen the Kret 14 KR dated February 8, 1992 of the Council of State;
- Having seen the Kret of His Majesty Samdech Norodom Sihanouk, King of Cambodia dated November 1, 1993 to maintain H.E. Thor Peng Leath as Governor of NBC;
- Having seen the Kret No 89 KR dated August 27, 1992 ;
- Having seen the Anukret on the Supervision of Commercial Banks No 29 ANKR dated November 16,1992;
A licensed bank shall observe at all times a minimum ratio fixed one to twenty between its net worth and its assets plus off balance sheet commitments and contingent liabilities made in all currencies.
The numerator, net worth, is determined in accordance with the annex attached hereto.
The denominator comprises:
- Total assets net of provisions allocated to individual risks
- Total of balance sheet commitments and contingent liabilities assumed net of provisions allocated to individual risks.
However, some of the following assets and off balance sheet contingent risk may be deducted therefrom:
- Cash, gold and balances held on current accounts with correspondent banks and with the National Bank.
- Assets fully secured by such items as guarantee deposits assigned according to precise contractual obligations.
- With the written approval of the National Bank the value of merchandise assigned specially to secure credits granted by the bank.
- Off balance sheet commitments and contingent liabilities assumed that result from forward operations (forward foreign exchange contracts, forward operations in respect of financial instrument etc.) there operations are to be declared separately to the National Bank which will treat them in a specific manner.
- Provisions to be constituted, but still to be accounted for, that have been deducted from the net worth in accordance with the calculation method referred to in article 2.
In complying with this regulation a bank shall deliver a periodic declaration to the National Bank. The content and periodicity of the declaration shall be determined by separate circular.
These arrangements apply from the end of May 1995.
Signed: Thor Peng Leath
Governor of NBC