Kingdom
of Cambodia
Nation Religion King
National
Bank of Cambodia
No. NBC/B700/52
February 17, 2000
Prakas
On
Controlling Bank's Large Exposures
The
Governor of the National Bank of Cambodia
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Referring to the 1993 Constitution of the Kingdom of Cambodia;
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Referring to Kram No. NS/RKM/0196/27 of January 26, 1996 promulgating the Law on the Organization and Functioning of the National Bank of Cambodia;
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Referring to Kram NS/RKM/1199/13 of November 18, 1999 promulgating the Law on Banking and Financial Institutions;
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Referring to Kret No. CS/RKM/0398/85 of March 10, 1998 on the appointment of H.E. Chea Chanto as Governor of the National Bank of Cambodia;
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Pursuant to the request of the Banking Supervision Department of the National Bank of Cambodia.
IT IS HEREBY DECIDED
Article
1:
Banks shall be required, under the conditions set forth in this
Prakas, to maintain at all times a maximum ratio of 20 percent between
their overall exposure resulting from their operations with each
individual beneficiary and their net worth.
A
large exposure means the overall exposure resulting from their operations
with a single beneficiary where such exposure exceeds 20% of their net
worth.
Article
2:
For the purposes of this Prakas, the net worth shall be calculated
in accordance with the provisions of the Prakas on the calculation of the
bank's net worth.
Article
3:
For the purposes of this Prakas, exposures, which are liable to the
risk of counter party default, shall be weighted items as defined in
Article 3 of the Prakas relating to the solvency ratio. However, items
deducted in calculating the net worth in accordance with the provisions of
the Prakas on the calculation of the bank's net worth shall not be counted
as exposures.
Article
4:
Individuals or legal entities who are interconnected in such a wa
that financial problems experienced by one or more of them would
necessarily entail serious financial problems for the other or all of them
shall likewise be deemed to constitute a single beneficiary.
In particular, such connections exist between two or more individuals or legal entities where:
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one of them directly or indirectly exercises control over the other;
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they are subsidiaries of the same parent company;
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they come under the same de facto management;
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one of them has an equity interest in the other exceeding 10 percent and they are bound by reciprocal guarantee agreements or have a special business relationship which each other (sub‑contracting, franchise, etc...).
The
National Bank of Cambodia may regard a group of customers as constituting
a single beneficiary if the connections between them seem to justify it.
Article
5:
The exposures defined in Article 3 shall be subject to internal
management and supervision procedures, in particular by setting limits on
the delegation of loan or commitment decisions, in such a way that the
maximum amount of the ratio set forth in Article 1 is respected at all
times.
Banks
shall take all necessary steps for keeping a complete centralized record
of their commitments, in particular those granted to interconnected
beneficiaries within the meaning of Article 4.
The
National Bank of Cambodia may ask to be provided with a report on the
steps taken.
Article
6:
Banks shall periodically file declarations of their large exposures
in accordance with a model drawn up by the National Bank of Cambodia.
Article
7:
All provisions contrary to those of this Prakas are hereby
repealed.
Article
8: The General
Directorate, the General Secretariat, the General Cashier, the General
Inspection, all NBC departments, and all banking and financial
institutions under the NBC supervisory authority shall be responsible for
the enforcement of this Prakas.
Article
9: This Prakas shall enter into force from the date of
its signature.
Phnom
Penh, February 17, 2000
Governor
Chea
Chanto
cc:
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Board of Directors members
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Parties stipulated under Article 8
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Archives
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Council of Ministers "for information"
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Council of Ministers Administration Department
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“for publication in the Official Gazette”