The Cambodian government will establish a committee to ensure the stability of the Cambodian financial system and protect it against internal and external shocks, the Ministry of Economy and Finance said this week in a press release.
The National Committee for Cambodian Financial Stability will play a critical role in managing financial crises in a timely and efficient manner, the ministry said. The committee will limit the effects of shocks to the system and stop them from spreading.
The ministry added that creating such mechanisms is now the norm around the globe.
“With the local financial sector ever more developed, diversified and integrated, each financial subsector is now interconnected, which requires a mechanism like this to respond to systematic risks,” it said.
Chea Chantho, governor of the National Bank of Cambodia (NBC), said in the 2018 annual supervision report that strong growth in services and means of payments requires a mechanism to control technological risks and protect the safety of consumers and the whole banking system.
He said that information on companies’ credit status is now available through the Credit Bureau of Cambodia, a service that will improve credit quality in the country.
“In the meantime, the consumer protection measures are also further enhanced through establishing a consumer protection’s working group, setting up hotlines for handling consumers’ complaints and other related issues, and issuing notices on illegal lending activities as well as the use of cryptocurrencies,” he said.
“The NBC will keep supporting the government in the implementation of the Rectangular Strategy, raising public confidence on the banking system, and making the banking system more effective, resilient, competitive, and integrated as well as further maintaining price stability in accordance with the Financial Sector Development Strategy 2016-2025,” he said.
“The NBC will further strengthen supervision, foster consumer protection, promote the use of the Riel, and advance financial inclusion,” he added.
In late April, the National Bank of Cambodia launched its Financial Stability Review (FSR), a report that aims to provide reliable financial data to the public to help mitigate risks.
Speaking at the launch, Neav Chanthana, NBC vice governor, said the FSR is a valuable document that helps the public and investors better understand the financial sector.
“It informs policy decisions in the public and private realms. It is particularly helpful for investors, financial institutions and relevant stakeholders, guiding decisions on investment, business expansion and helping mitigate any potential risks,” she said.
As of 2018, the banking system consisted of 43 commercial banks, 14 specialized banks, 7 microfinance deposit-taking institutions, and 74 microfinance non-deposit-taking institutions.