Logo of Phnom Penh Post newspaper Phnom Penh Post - New moves to boost banking

New moves to boost banking

New moves to boost banking

C ambodia's National Bank has announced plans to launch treasury bills and

introduce electronic funds transfers to boost the banking sector.

"We

have not yet decided what are going to be the technical characteristics of those

instruments, but they will definitely be the first riel-denominated asset that

will be offered to savers," said National Bank Deputy Governor Tioulong

Saumura.

"This will be one way to mobilise savings, both institutional

savings as well as private," said Tioulong, speaking at the Foreign

Correspondents Clubs of Cambodia on June 21.

She said the proposal had

already been approved by the cabinet and the bank expected the new bills to be

introduced soon, while plans to set up a clearing system were in the

pipeline.

She also said Cambodia was looking at electronic funds transfer

methods via debit cards to be used instead of cheques.

Tioulong said

there had been important improvements in the sector in terms of strengthening

the supervisory role of the National Bank but most of the 28 licensed foreign

and Cambodian-owned commercial banks still deal in foreign currency.

"The

society is not overbanked, the society is underbanked to the extent that it

doesn't use enough the banking services which a modern country

uses."

"The banking industry, for the time being, does not contribute

much to the local economy - to the disappointment of the public authorities.

They (banks) have not yet reached the level with which we would be happy," the

Paris-trained deputy said.

Cambodians are still suspicious of banks,

which together with the use of money were abolished by the Khmer Rouge regime in

the 1970s, and the vast majority prefer to keep their savings at home in cash or

gold. Most of the commercial banks were opened during the early 1990s and do not

provide deposit or loan facilities, and many of the banks are alleged to be

fronts for money laundering.

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