LAW DATED AUGUST 27, 1992

ON THE SUPERVISION OF FINANCIAL INSTITUTIONS

The State Council of Cambodia,

decided;

to promulgate the Law on the Supervision of Financial Institutions adopted  by Assembly of the State of Cambodia on August 10, 1992 during the 23rd Session of the First Legislature.

Phnom Penh, August 27, 1992

P. Council of State

President

Signature and Seal

Heng Samrin

 

CHAPTER I:

GENERAL PROVISIONS

Article 1:The State of Cambodia authorizes the creation of Financial Institutions in Cambodia.

Article 2:

Financial Institutions means banks and companies which conduct the financial activities as: commercial, agricultural, industrial, savings, investment and development banks, credit finance companies, and finance services companies.

Article 3:

All provisions for the establishment of Financial Institutions shall he included in the Sub-Decree. The National Bank of Cambodia shall issue regulations governing. the conduct of business by Financial Institutions.

CHAPTER II:

APPLICATION FOR BUSINESS LICENCE

Article 4:

Applicant for Financial Institution business license shall provide a business plan and describe the activities of the Financial Institution in details and submit to the National Bank of' Cambodia. A commercial bank may he authorized to he established by h National Bank of Cambodia with the approval of the Council of' Ministers.

Article 5:

A licensed Financial Institution may open additional branches in Cambodia with the approval of the National Bank of Cambodia.

Article 6:

A licensed Financial Institution authorized permitted to set up its head office or branch office may change its location with the approval of the National Bank of Cambodia.

Article 7:

A licensed Financial Institution may conduct other financial services with the approval of' the National Bank and with the approval of the Council of Ministers

Article 8:

A licensed Financial Institution shall maintain a capital deposit with the National Bank of Cambodia between 5% and 15% of its capital as shall he prescribed by the National Bank of Cambodia and maintain capital in its books in a proportion of between 5% and 15% of its assets as shall be prescribed by the National Bank of Cambodia.

Article 9:

The National Bank of Cambodia may require a licensed Financial Institution to maintain required reserves of between 5%, and 50% of deposits from the public and other borrowings as prescribed by the National Bank of Cambodia and in special cases of between 2% and 20%. A licensed Financial Institution shall maintain these reserve in form of cash and/or balances with the National Bank of Cambodia.

Article 10:

No legal person may hold more than 20% of the share Capital without the approval of the National Bank of Cambodia.

Article l 1:

A Financial Institution license shall be valid only for the legal person to whom it was granted and may not he transferred or assigned to any other legal person (including another Financial Institution) without the prior written approval of the National Bank of Cambodia.

CHAPTER III:

THE FINANCIAL INSTITUTION BUSINESS

Article 12

The business of each Financial institution shall he controlled by an auditor not being a member of the staff of the Financial Institution who may he a private expert approved by of the National Bank of Cambodia.

Article 13:

The rule for the liquidation of a financial institution shall he defined in the Sub-Decree.

 

Article 14:

The National Bank of Cambodia shall have power to issue regulations for the granting of credit by Financial Institutions.

Article 15:

The Functions of the Financial Institution shall he defined in their Articles of Association which shall be approved by the National Bank of Cambodia.

Article 16:

The National Bank of Cambodia shall establish rules for the use of the following negotiable instruments by the Financial Institutions and their customers:

CHAPTER IV:

PENALTIES

Article 17:

Financial Institutions do not adhere to their obligations under the law shall be liable to the following penalties:

For serious offences involving individuals or Government interests, a fine of between 500,000 Riel and 30,000,000 Riel or a period of imprisonment of between on month to five years, or both.

Article 18:

Those who commit the following financial crimes shall he punished by a prison term of between one year and five years, or both:

refusal to pay a check:

Article 19:

A person who refuses to a bill of exchange or promissory note on the due date thereof shall be subject to the penalties laid down in Article 18.

Article 20:

Any laws which contradict this law shall he considered null and void.

This law is approved by the National Assembly on August 10, 1992 at its 23rd Meeting of its first legislature.

 

Phnom Penh, August 11, 1992

The Chairman of the National Assembly

Signature and Seal

Chea Sim