A new prakas should better gauge the status of loans from licensed microfinance institutions
and specialized banks providing rural credit. Prakas 186 requires them to classify
their portfolios taking into account both the financial position of the borrower
and the repayment schedules involved. The four classes - standard, substandard, doubtful
and loss - require specific provisions of between 10 and 100 percent against default
for all but the first class. Another prakas, number 187, reduces the liquidity ratio
for banks and financial institutions from 100 percent to a minimum 80 percent. A
spokesman for the National Bank of Cambodia said the move came at the behest of the
private sector.
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