T rade between Cambodia and Vietnam was given a boost this week, as banks from both countries signed an agreement enabling the implementation of cross-border banking services.
The Vietnam Bank for Agriculture and Rural Development (AGRIBANK) last year approached Cambodia's largest bank network, ACLEDA Bank Plc, about the agreement, and, supported by the National Bank of Cambodia, came to an arrangement in just three months.
Customers will now be able to transfer money in either dong or riel directly into Vietnamese accounts, and vice versa, via the electronic SWIFT network. Rules and procedures for transfer services will be standardized. Initially, priority will be given to the respective bank branches in Cambodia's Svay Rieng, Takeo and Kampong Cham provinces and Vietnam's An Giang and Tay Ninh provinces.
While ACLEDA Bank already has agreements with 41 banks in 35 countries, according to In Channy, ACLEDA general manager, the deal is unique in that it allows immediate direct trade between the two nations, without the day-long delay of sending payments through New York which involved converting currencies into US dollars first.
"Time is money. This agreement will facilitate border trade payment services by making transactions immediate. It can reduce a lot of waiting," he said.
ACLEDA hopes the new system will encourage international trade between Cambodia and Vietnam. "By greatly easing the procedures for our traders and businessmen to settle their transactions in a fast, safe and efficient way, we are paving the way for further growth and future prosperity for our nations," Channy said.
"After years of struggle to develop our economies during a time of great difficulties within the region, agreements such as this can only stimulate further growth, and raise the competitiveness of our businesspeople," he said.
An ACLEDA official told the Post Cambodia's combined imports from and exports to Vietnam were estimated at US$362 million in 2003, US$515 million in 2004 and US$317 million for the first six months of 2005.
While ACLEDA has been a commercial bank since 2003, it started life ten years earlier as an NGO providing micro-loans to poor, rural Cambodians. Staying true to its poorest customers remains a priority, said Channy, and this agreement will benefit rich and poor clients alike.
"Our job is to help poor people take advantage of border trade. Now rural people who trade with Vietnamese won't need to come to Phnom Penh, but can deal with a provincial branch on the border," he said.
"This agreement will make both banks stronger," said Kieu Trong Tuyen, AGRIBANK Deputy General Director. "Cambodia and Vietnam have a long relationship, a long history, and we think that having these banks cooperating will improve relations between the countries."