ANUKRET DATED NOVEMBER 16, 1992

ON THE SUPERVISION OF COMMERCIAL BANKS

No 29 ANKr.

The Council of Ministers,

upon the request of the Governor of the National Bank of Cambodia;

decides:

CHAPTER 1

GENERAL PROVISIONS

Article1:

The National Bank of Cambodia shall be responsible for the supervision of commercial banks.

Article 2:

Commercial bank means a Bank licensed to conduct commercial banking business including a branch of a foreign bank licensed to carry on such business. Commercial banking means the business of accepting all kinds of deposits of money and employing such money in one or several ways as follows:

  1. Granting credit.
  2. buying and selling of bills of exchange. and/or any other negotiable instrument.
  3. Buying and selling of foreign exchange.
  4. Provide to the customers other payment instruments.

CHAPTER II

ACTIVITY AND BUSINESS

Article 3.

The National Bank of Cambodia shall announce the minimum capital of ten billion riel to be maintained at all times by a commercial bank and by a branch of foreign bank, licensed to conduct business in Cambodia.

Article 4.

A commercial bank and a branch of foreign bank may be authorized by the National Bank of Cambodia to establish in Cambodia after the approval of the council of Ministers. Commercial banks shall be incorporated only in the form of a limited public company.

Article5.

No person shall hold more than 20 percent of the total share capital of a commercial bank except with the approval of the National Bank of Cambodia.

Article 6.

No commercial bank shall transfer its shares to any person if such transfer would cause that person to hold shares in a percentage greater than that percentage prescribed in the section 5.

Article 7.

Ordinary share and preference share certificates of a commercial bank shall carry the name of the owner and have a par value of not less than 100,000 riel per share and the transfer of such shares is permitted except in the case as prescribed in the section 5.

Article 8.

A licensed foreign bank branch may establish additional dependant offices with the approval of the National Bank of Cambodia.

A foreign bank branch that is licensed to conduct banking business shall place its assets in Cambodia in accordance with the procedures and conditions as prescribed by the National Bank of Cambodia.

The assets that it shall maintain are:

Article 9.

Commercial banks constituted in Cambodia and licensed to conduct commercial banking business may open branches with the approval of the National Bank of Cambodia.

Article 10.

A foreign commercial bank wishing to open a representative office in Cambodia or any commercial bank established in Cambodia that wishes to establish a representative office outside Cambodia shall obtain the approval of the National Bank of Cambodia.

Article 11

A licensed commercial bank shall obtain the approval of the National Bank of Cambodia in order to change the location of its Head Office or any branch office.

Article 12.

No person other than a commercial bank shall conduct the commercial banking business.

Article 13.

A commercial bank and foreign bank branch licensed to conduct commercial banking business shall maintain a deposit for security with the National Bank of Cambodia in the proportion of 5 to 15 percent of its capital fund as prescribed by the National Bank of Cambodia.

Article 14.

A commercial bank shall maintain a capital fund in its books of account in proportion:

The assets as prescribed above do not include cash deposits with the National Bank, deposits with other banks within or without Cambodia, government securities and such other assets as prescribed by the National Bank of Cambodia.

The National Bank of Cambodia shall give 15 days notice of a change in the ratio.

Article 15.

Each commercial bank shall maintain a required reserve in cash and/or in deposits with the National Bank of Cambodia against its deposit liabilities and other borrowings in the proportion prescribed by the National Bank of Cambodia of not less than 5 percent and not more than 50 percent except in special cases of between 2 percent and 20 percent

Article 16.

No commercial bank shall

  1. Reduce its capital without authorization of the National Bank of Cambodia;
  2. Accept its own shares, or the shares of any other commercial bank as security for any loan.
  3. Purchase or hold immovable property except
  1. for use as business premises for commercial banking or for the use as residences for its staff with the approval of the National Bank of Cambodia.
  2. property acquired as the result of \ settlement of any debt or guarantee in respect of credit granted or as the result of the purchase of an immovable property mortgaged the commercial bank at an auction conducted pursuant to an order of the court.

4. Purchase or hold shares in a limited company in an amount exceeding 10 percent of the total amount of such companies' shares or hold shares or debenture of an aggregate value of more than 20 percent of the capital fund of the commercial bank, unless authorized by the National Bank.

Article 17.

No commercial bank shall appoint or allow any person with the following qualification or attributes to be or to perform the duty of the director, manager, deputy manager, assistant manager or adviser:

  1. Being a bankrupt.
  2. Having been imprisoned by a superior court judgement for an offence related to property committed with dishonest intent.
  3. Having been dismissed or discharged from the governmental service or other government organization or agency on a charge of dishonest act whilst in office.
  4. Having been a board member, manager deputy manager, assistant manager of a commercial bank of which the license was withdrawn unless an exception has been granted by the National Bank of Cambodia.
  5. Being removed from office in a commercial bank on the recommendation of the National Bank of Cambodia
  6. Being a government official in political service.
  7. Being a government officer having the duty to control the operation of a commercial bank except for in cases approved by the National Bank of Cambodia to assist the commercial banking operation.

Article 18.

Each commercial bank shall:

Article 19.

The National Bank of Cambodia shall have the right:

Article 20.

A commercial bank shall appoint an independent auditor approved by the National Bank of Cambodia to conduct an audit of the commercial bank's accounts and operations.

Article 21.

A commercial bank shall be subject to all income and other taxes and duties imposed by the State of Cambodia.

CHAPTER III

LIQUIDATION

Article 22.

If the financial position of a commercial bank is not in compliance with the minimum requirements of the commercial bank Law, this Sub-Decree and/or other relevant regulations of the National Bank of Cambodia the commercial bank may, by the decision of the National Bank of Cambodia, be place under conservatorship to preserve, remedy or resolve the financial position of the commercial bank.

Article 23.

In the case of liquidation the Bank's assets shall be liquidated by the conservator, whose expenses shall be paid before other claims.

Article 24.

The National Bank of Cambodia shall establish by regulation detailed provisions for the conservatorship and liquidation of a commercial bank. Such regulation shall have due regard to any provisions of any prevailing company law or other law concerning the liquidation of a company.

CHAPTER IV

PENALTIES

Article 25.

A commercial bank that fails to carry out the requirements of the Financial Institutions Law and this Sub-Decree, or other regulations of the National Bank of Cambodia shall be subject to the following specific measures

Article 26.

The administrative measures provided above shall not conflict with the prevailing civil or criminal code.

Article 27.

In cases involving the loss of state or private property, the National Bank of Cambodia has the right to send the matters before the court for commitment under the process of the law.

CHAPTER V

FINAL PROVISIONS

Article 28.

All regulations that contradict or conflict with this Sub-Decree shall be null and void.

Article 29.

The minister of Cabinet of the Council of Ministers, the Governor of the National Bank of Cambodia, other concerned Ministers, and heads of concerned Institutions chairmen of municipal and provincial committees shall comply with this Sub-Decree in accordance with their duties.

Article 30.

The Sub-Decree shall be effective from the date of promulgation.

 

For Council of Ministers

Chairman

Say Chhum