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Banking prakas

Banking prakas

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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