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NBC unveils online trading platform

Traffic passes in front of the National Bank of Cambodia’s head office yesterday in Phnom Penh.
Traffic passes in front of the National Bank of Cambodia’s head office yesterday in Phnom Penh. Pha Lina

NBC unveils online trading platform

In order to promote interbank transactions and lending, the National Bank of Cambodia (NBC) will officially launch a new online platform tomorrow which allows financial operators to apply for and trade the central bank’s financial instruments like negotiable certificates of deposits (NCDs), liquidity-providing collateralised operations (LPCOs) and currency.

Central Bank Director-General Chea Serey confirmed yesterday that the online platform, called the National Bank of Cambodia Platform (NBCP), will be officially launched on Friday and would help cut down transaction costs. She added that the NBC was currently registering financial institutions that wanted to participate in the new system.

“The introduction of the NBCP, which is an online trading platform, will allow participants to find out online [which entities want to conduct] which transactions at which prices, to negotiate online in a confidential manner, and to execute the transactions on a real time basis,” Serey said. “This initial version of the NBCP is still limited, but it does provide convenience, transparency, and a fast channel for financial institutions to transact.”

She added that the platform should help to build trust in the fragmented interbank lending market that previously depended on manually processed trades with time-consuming paperwork, and which now allows financial institutions to bid for LPCOs and subscribe for NCDs online. Financial operators including commercial banks, specialised banks, microfinance institutions, leasing companies and money changers that accept the terms and conditions of the NBC can use the platform.

While she admitted that the platform was in its early stages, use of it would see more central bank operations moving online to further cut transaction and documentation costs.

So Phonnary, vice president of Acleda Bank, said that the launch of the NBCP will promote trust among market participants and increase transparency in the market. She also hopes that the platform would help financial institutions reduce overhead.

“We have seen that online banking is a good method for cost-effective and time-saving financial transactions,” she said. “I do hope that the NBC online system will help us, as it requires less time and fewer costs.”

Neoh Sze Ming, deputy chief executive officer of CIMB Bank Plc, said that the introduction of the new online platform will make it easier for banks to participate in the LPCO and NCD transactions.

“Since 2016, the NBC has been very helpful in providing short-term funding instruments for banks via the LPCO framework,” he said. “The NBC recognises the need for this because the industry loan-to-deposit ratio is around 100 percent.”

This article has been amended to say that the NBC online trading platform launches tomorrow.

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