To facilitate dollarized economy, Cambodian banks and financial institutions have increased their cash handling through dual currencies ATM machines. This introduction has been common and convenient for people to cash in and out both Local and US currency at anytime and anywhere. Some new model ATMs can offer additional functions such as transfer and payment. Almost all of the basic banking services are accessible and available at rural districts as more of microfinance institutions equip with ATM machines.
The over-the-counter transactions could be reduced as a result of increasing number of bank account holders because people could have more options of either transacting via ATM or other mobile applications. Nevertheless, local currency would still be a default currency among others.
Unlike western and developed countries where the love affair of the physical currency, in Cambodia, the machines dispensing cash 24/7 are expanding at an exponential rate. Many banks have now moved to installing dual currency dispensing ATM’s machines given the rise in the demand for local currency through this ATM’s.
In Cambodia, our relationship with cash has dispensed through machines and become stronger as more of such machines are installed all over. Our appetite for cash is increasing unlike in Europe, where the number of installed ATMs has been declining by 6% a year since 2010.
With the advent of the ATM’s, cash transporting armoured cars are slowly becoming rare, their main function being restocking the bills in the ATMS rather than delivering physical payroll packets to employees all over the country, especially those outside the city and urban areas. With more wages being paid into employees’ bank accounts, replacing the traditional cash payment method, 90 percent of daily transactions are still conducted in hard cash. There has been an increase in the demand to withdraw money in the local currency from the rising number of Automated Teller Machines (ATMs) installed across the nation.
This is especially true of Small and Medium Enterprise (SMEs) and civil servants, said So Phonnary, executive vice-president of ACLEDA Bank. “At ACLEDA Bank we process payrolls for civil servants across the country so we need a lot of riels in our ATMs. We also have a large number of garment workers who bank with us and receive their salaries in US dollars, but want to withdraw in riels.” So said.
She added that the overall circulation of riels is increasing, because the central bank has encouraged their use through various monetary policies such as Negotiable Certificate of Deposit (NCD) and Liquidity-Providing Collateralized Operation (LPCO). Hence, it has become vital to ensure liquidity of the currency to stock their ATMs.
“To ensure we have a large supply of riels we offer high interest on riel deposits. As of December last year we had more than 850,000 riel accounts with a total balance of more than 2.5 trillion riels, approximately $615 million. Our total account balance sits at just more than $4.2 billion.” So said.
PRASAC Microfinance Institution is another company implementing policies to ensure that their customers can access their money in the local currency. Say Sony, senior vice-president, said the institution is currently working with other bank partners to allow the instant transfer of riels through the Fast And Secure Transfer (FAST) system to mobile bank accounts.
Adding, “Our ATM network plays a vital role for riel transaction with 50 percent of our machines stocked with riels. We also promote riels to all provinces and ensure we keep an attractive riel deposit interest rate,” Say said
“We would also like to encourage our micro and small clients that conduct business transaction in riels to also apply for loans in riels to keep consistency,” he added
PRASAC has installed 135 ATMs, 509 point of sale terminals. It has 16,000 mobile banking users across Cambodia.
However, Yongjae Jang, chief financial officer at KB Financial in Cambodia, said that currently the bank does not have any ATMs that stock the riel currency, because its customers haven’t requested it. “Our ATM’s dispense $100 notes, dispensing a total of $250,000 a day,” he said.
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