The National Bank of Cambodia yesterday marked its 40 anniversary with a ceremony presided over by Prime Minister Hun Sen, who praised the Central Bank’s key role in the country’s development.
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Speaking at yesterday’s ceremony, Mr Hun Sen said the Central Bank re-opened in Oct 10, 1979, three months after the fall of the Khmer Rouge regime, who had obliterated the country’s financial system.
Starting from zero, the Central Bank has continuously moved forward, bringing the country forward with it, Mr Hun Sen said.
“Cambodia’s banking sector has enjoyed remarkable growth in the last 40 years,” he said.
“With an effective and inclusive system, banking is becoming a pillar of the country’s economic growth. Local and international institutions have acknowledged the role of the banking sector in stabilising the macroeconomic situation and improving people’s livelihoods,” he said.
He noted that banking services have expanded across the country, reaching disadvantaged populations and improving living conditions.
“The loans provided by private banking institutions allow Cambodians to expand their businesses which helps them improve their lives,” Mr Hun Sen said. “This is a significant contribution to socio-economic development and national harmony.”
To keep moving forward, Mr Hun Sen said the Central Bank should continue to promote the riel, the local currency, which will strengthen national identity.
Mr Hun Sen also highlighted the need to continue adopting new technologies to modernise the industry, and to raise public awareness of financial services, particularly in rural areas, to protect people against overindebtedness.
Mr Hun Sen also stressed the need to strengthen institutional capacity to combat money laundering.
NBC governor Chea Chanto also highlighted the local banking sector’s impressive development in the last 40 years.
“Any development, especially in the banking sector, would not have been possible without the government’s efforts to maintain political stability and peace,” he said.
He noted that, in the past two decades, assets in the banking sector increased 109 times over, from around 1.7 trillion riel ($415.5 million) to 189 trillion riel ($46.2 billion), while credit rose 178 times from around 0.7 trillion riel ($171.1 million) to 118 trillion riel ($28.8 billion).
According to Mr Chanto, the main sources of financing are domestic deposits which have increased 141 times over, from 0.7 trillion riel ($171.1 million) to 100 trillion riel ($24.4 billion).
The number of credit accounts has now reached 3 million while there are 6.8 million deposit accounts, he added.
“This momentum shows the confidence that investors and the public have on the banking system in Cambodia,” he said.
He said NBC will continue to promote the use of the riel as well as the development of a more active and efficient interbank market. “Doing so will help improve the effectiveness of our monetary policy,” he said.
He said public trust on the riel is on the rise thanks to policies by the Central Bank and the government. The amount of riel in circulation has increased by 16 percent every year on average in the last 20 years.
Mr Chanto closed his remarks by saying that human capital development will continue to be a priority for the Central Bank.
Dr In Channy, chairman of the Association of Banks in Cambodia, congratulated the Central Bank for its achievements.
“In this auspicious occasion, we would like to express our appreciation for the work carried out by His Excellency Chea Chanto and his team,” he said. “We would like to thank you for the guidance and support we have received from you as we work to build a financial services sector that underpins Cambodia’s emergence as one of the fastest-growing economies in Asean,” he said.
But remarked that there was still a lot of work to do, particularly when it comes to financial inclusion, financial literacy and greater adoption of the riel.
The Central Bank was first established in 1954 following the Kingdom’s independence from France. From 1975 to 1979, the whole financial system ceased to exist, with the Central Bank being re-established in October of 1979, after the Khmer Rouge regime was overthrown.
In 1992, the then-called ‘People’s National Bank of Kampuchea’ was renamed ‘National Bank of Cambodia’.