Specialize bank in cambodia

Specialized Banks

ANCO Specialized Bank (ASB)
Angkor Capital Specialized Bank (ACSB)
CAMKO Specialized Bank (CKB)
Tomato Specialized Bank (TSB)
First Investment Specialized Bank (FISB)
PHSME Specialized Bank (PHSME)
Rural Development Bank (RDB)

            All this bank’s running as  specialize bank because there are some rules:

SPECIALIZED BANK According to PRAKAS No B700-05 ON LICENSING OF RURAL CREDIT SPECIALIZED BANKS dated on 11 January 2000, Specialized Banks as defined in Chapter I of the Law on Banking and Financial Institutions (LBFI) and in accordance with Article 14 of this law must obtain a license from the National Bank of Cambodia (NBC) before starting business. 

An applicant for a license of specialized bank shall take one of the legal forms provided for in Chapter III of the Law on Banking and Financial Institutions. Before obtaining a license, an applicant must show a minimum registered capital a least equal to a sum fixed by the relevant Prakas No. B7-08-193 PK, issued by the National Bank of Cambodia. 

A-    PROCEDURE FOR SUBMITTING A LICENSE APPLICATION

The application for a license8 shall be drawn up by a dully authorized individual (manager or person expressly empowered to such effect) and shall indicate the following: 

(a)    Name or business name of the institution;

(b)   Register address of the headquarters;

(c)    Legal form and the articles of association or other founding instrument;

(d)   Type of securities representing the capital, and connection between the holding of such securities and the exercise of voting rights;

(e)    Amount of authorized and paid-in equity capital;

(f)    Distribution of shares and voting rights, and possible agreements between shareholders acting in concert with a view of directing the policy of the bank.

(g)   Capital Contributors which will hold 5 percent or more of the voting rights must provide the information listed in article 6 of this Prakas; 

(h)   Identity of at least two persons responsible for the effective direction of the specialized bank’s business. These designated managers must fill in the curriculum vitae and questionnaire appended in Annex II and furnishes a copy of their policies records; 

(i)     Identify of the members of the decision-making body

(j)     If the legal entity for which the application is made has already been founded, provided a description of its business and certified copies of its last three audited balance sheets.

(k)   Description of the planned activity over the next three years:

 Nature and volume of the difference types of lending liable to appear on the balance sheet, and other possible service offered to customers or members (for loans: nature, form, purpose, main terms and conditions, annual volume, and amount outstanding), 

 Type of clients that the institute intends to seek;

             Nature of planned financial resources: own funds, subsidies, subordinated debt, deposits, borrowing etc…As appropriate, specify the nature and ownership of these resources in the event of any ambiguity (Subordinated debt for example);

 Likely number of employees over the next three years and corresponding payroll, the break down of staff by category;

 Location of existing branches or planned branches,

 Planned organization and resources, especially as regards accounting procedures and computer system;

             Balance sheet and profit and loss account forecasts for the next three accounting periods.  Forecast level of main prudential ratios (as defined by the NBC) at the end of the next three accounting periods.

(l) Internal audit:

 Planned internal audit organization for application of provision of Article 43 of the Law on Banking and Financial Institutions.

 Identity of proposed external auditors, nature of assignments given to external auditors. 

Capital contributors holding 5 percent or more of the capital or the voting rights of institution must provide the following information: 

(a) Identity of the capital contributor;

(b) Indicate the amount and percentage of the proposed participation and its equivalent in voting rights;

(c) Describe the activities of the capital contributor;

(d) State whether the capital contributor and the companies possibly associated with it carry on a financial activities;

(e) Indicate the internal and external audit procedures of the capital contributor.

(f) Indicate whether, over the preceding ten years the capital contributor has been the subject of an investigation or of a professional, administrative, or judicial proceeding of a material nature;

(g) State the capital contributor’s objectives for the acquisition of an equity holding in the institution. Give all relevant information; 

(h) Indicate whether there is significant business between the capital contributor and the applicant and how these relations are likely to develop in the future; and

(i) Indicate the main banking relations of the capital contributors in Cambodia and how long these relations have existed. 

B- LICENSE APPROVAL AND RELATED FEES 

The National Bank of Cambodia shall provide written notification of its decision within three months from the receipt of application including all relevant documents.  Where appropriate, the approval shall set out the specific conditions laid down by the National Bank of Cambodia for its entry into force and the timetable for the project.  If the project has not been completed upon expiry of the deadline and if no extension has been requested, the approval becomes void. An indefinite license shall be provided by the National Bank of Cambodia to all specialized banks operating in the Kingdom of Cambodia9.  A licensed specialized bank shall maintain an amount equal to five (5) percent of its registered capital in a permanent account with the National Bank of Cambodia, and be subject to the following conditions10:

A-    Deposit in Riel will bear interest at half of the refinancing rate set by the National Bank of Cambodia. The interest payment shall be settled semi annually.

B-    Deposit in foreign currency will bear interest at three eighths (3/8) SIBOR (Singapore Inter-Bank Offered Rate). The interest payment shall be settled semi-annually. The National Bank of Cambodia will notify all specialized banks of applicable rate for the relevant period.The National Bank of Cambodia will only reimburse the capital deposit to a licensed Specialized Bank if it voluntarily liquidates and has no deposit liabilities. The institutions shall pay a fee of KHR 500,000 upon submission of the application for a license. The annual license fees shall be paid before 15 of January as follows11:

 - KHR 10 million for the bank headquarters,

 - KHR 8 million for the first to seventh branch of a bank

 - KHR 5 million for the eighth branch upward

For institutions established during year, the license fee shall be calculated on a pro rata basis for the period remaining to year’s end.  In the event of late payment of the license fee, the Institutions concerned shall be fined by paying interest on the overdue payment at the prevailing refinancing interest rate for a period up to thirty days. If they are not in order after this period, their license shall be revoked

 C- PRUDENTIAL RULES Applicants with no operating history must pay up 100 percent of registered capital into an account open with NBC prior to commencement of operations. A licensed specialized bank shall deposit 5 percent of its deposits into its account maintained with the National Bank of Cambodia. This reserve requirement shall be maintained under the conditions set forth in Regulation on reserve requirement.  A licensed specialized bank shall observe all the regulatory requirements to which banks are subject, particularly the reporting requirements.

D- OTHER PROVISIONS The specialized bank shall pay a fee of one percent of share capital for such case:- 

 Notifications relating to acquisitions or disposals of shareholdings in the context of Article 23 of the Law on Banking and Financial Institutions

 Authorization applications relating to acquisitions or disposals of shareholdings in the context of Article 24 of the Law on Banking and Financial Institutions In the event of the appointment of new managers (namely the two persons responsible for the effective direction of the bank’s business) the following information must be furnished to the National Bank of Cambodia:

- A document providing proof of such appointment (board meeting minutes for example),

- Curriculum vitae and questionnaire appended in Annex II. All these documents must be furnished at least one month before the person concerned takes up his/her position. Other changes in the legal or financial status of a specialized bank must be submitted to the National Bank of Cambodia for approval.  Application materials should be accompanied by a description of the reason for the planned operation and, as applicable, by the following information:

- Extension or redefinition of activities: the information referred to in paragraph (k) of Article 5 of Prakas No. B700-05 must be furnished;

 -  Capital reduction: description of terms and conditions, namely legal and accounting arrangement and indication of the new amount of own funds  with possible effects on future business and prudential ratios;

 -  Change in legal form: draft amendments to the Articles of Association and   information concerning management bodies;

 - Change in business name: draft amendment to the Article of Association. All these changes must be submitted to the National Bank of Cambodia at least three months before their enforcement. Bank shall pay a fee of KHR 1 million for a change of one page of the Articles of Association.