The National Bank of Cambodia (NBC) on July 13 invited the public to swap old or ripped riel notes for new ones of the same value free-of-charge at its branches nationwide, save for its headquarters, in an apparent initiative to promote the use of the local currency.
The banknotes will be exchanged as long as they are not damaged beyond recognition and can be confirmed to be genuine, the central bank said.
It warned, however, that it reserves the right to confiscate counterfeit and overly-damaged bills without reimbursement, in accordance with articles 51-53 of the 1996 Law on the Organisation and Conduct of the National Bank of Cambodia.
Article 51 says the NBC “may decline to exchange notes or coins if their designs are illegible, misshaped or perforated, or if more than 30 per cent of their surface has been lost. Such currency shall be withdrawn and destroyed without indemnity to the owner, except that, in special cases, the central bank may determine whole or partial compensation”.
Article 52 says “counterfeit notes included in deposits or presented for exchange shall be seized without compensation and reported to the competent authorities”.
And Article 53 adds that the NBC “shall not be required to provide any compensation for notes and coins that were lost or destroyed – it may confiscate without compensation any notes that have been altered in their external appearance, in particular notes that have been written on, painted on, overprinted, stamped or perforated, or to which adhesive matter has been applied, or which have been defaced in any other way”.
In light of the Covid-19 outbreak, the central bank encourages the public to use electronic payments and adopt hygienic practices while handling banknotes.
Prasac Microfinance Institution Ltd (Prasac) executive vice-president Say Sony told The Post that the move is meant reduce the volume of old riel banknotes in circulation and “enhance the value” of the local currency.
“This encourages people to use new riel banknotes and promote the value of the riel, as well as to reduce the use of old banknotes that are at risk of various infections, especially Covid-19,” he said.
Prasac has always been actively involved with the government in promoting the Cambodian riel, he asserted, adding that its ATMs are stocked with crisp new bills.
Cambodia Post Bank Plc CEO Toch Chaochek welcomed and voiced support for the NBC’s continued promotion of the riel’s value.
Banking institutions are required to have at least 10 per cent of the loan portfolio in the local currency, he said, adding that Post Bank has fulfilled this obligation since 2018 – at least $70 million of its current credit balance of about $700 million is in riel.
“Most of our people do not want to circulate the riel, so we have been involved in promoting [its] circulation.
“We encourage riel depositors to get higher interest rates than the [US] dollar, and Khmer money borrowers [may] also be able to get a lower interest rate [for] the same amount of money, the same period, the same collateral,” Chaochek said.
The NBC emphasised that the riel represents national identity, national sovereignty, economic independence and strengthens social unity.
It said it hopes that all stakeholders, especially the Cambodian people, will continue to work together to promote the national currency and actively contribute to combating any acts that adversely affect its value.