Kingdom of
Cambodia
Nation
Religion King
The
National Bank of Cambodia
00-006/PrK
PRAKAS
ON
THE
LICENSING
OF
MICRO-FINANCING INSTITUTIONS
The Governor
of the National Bank of Cambodia
-
With
reference to the Constitution of the Kingdom of
Cambodia;
-
With
reference to the Kram NS/RKM/0196/27 of January 26, 1996 promulgating the Law on
the Organization and Functioning of the National Bank of
Cambodia;
-
With
reference to the Kram NS/RKM/1199/13 of November 18, 1999 promulgating the Law
on Banking and Financial Institutions;
-
With
reference to the Kret CS/RKT/0398/85 of March 10, 1998 on the appointment of His
Excellency Chea Chanto as Governor General of the National Bank of
Cambodia;
Pursuant to
the request of the Banking Supervision Department of the National Bank of
Cambodia
Decides as
follows:
Chapter I:
General Provisions
Article 1:
The National
Bank of Cambodia (NBC) shall issue a license to carry out micro-financing
operations (MFI license) to any micro-financing institution (MFI) that satisfies
the requirements of this Prakas. All other nongovernmental organizations,
associations, entities or MFIs, which cannot satisfy the license requirements,
and are involved in credit services, for individuals or solidarity groups, shall
register with NBC.
Article
2:
A licensed
MFI shall only conduct banking operation as defined in Article 2 of the Law on
Banking and Financial Institutions. Credit services and savings shall be deemed
to be permitted thereunder, unless prohibited by this Prakas or the terms of the
decision granting the MFI license.
All MFIs,
nongovernmental organizations, and associations, whether licensed or registered,
shall be excluded from:
(a) leasing, derivatives and dealing in gold, precious metals, raw materials forward dealings in foreign currencies.
(b) providing payment services through checking accounts or swap or forward dealings in foreign currencies.
Article
3:
An applicant
for an MFI license shall be incorporated as a limited liability company or a
cooperative.
Article
4:
A licensed
MFI shall have a minimum registered capital of KHR 250
million.
Chapter II:
Procedure for Submitting a License Application
Article
5:
The
application for a license shall be drawn up by a duly authorized person (manager
or person expressly emproved such effect) and shall indicate the
following:
(a) Name or business name of the institution.
(b) Registered address of the headquaters.
(c) Legal form and the Articles of Association or other founding instrument.
(d) Type of securities representation the capital, and connection between the holding of such securities and the exercise of voting rights.
(e) amount of quthorized and paid-in equty capital.
(f) Distrbution of shares and voting rights, and possible agreements between shareholders acting in concert with a view to derecting ther policy of the institution.
(g) Capital contributors which will 5 percent or more of the voting rights must provide the information listed in Article 6 below.
(h) Identity of at least two persons responsible for the effective direction of the MFI's business.
(i) Identity of the Members of the decision-making body. This information must be supplemented by a curriculum vitae and a statement certifying that none of the individuals concerned is subject to the progibitions set forth in Article 18 of the Law on Banking and Financial Institution.
(j) If the legal entity for which the application is made has already been formed, provide a description of its business and certified copies of its audited balance sheets for operations in any of the previous three years.
(k) Description of the planned activity over the next three years:
- Nature and
volume of the different types of lending liable to appear on the balance sheet,
and other possible services offered to customers or members (for loans: nature,
form, purpose, main terms and conditions, annual volume, and amount
outstanding),
- Type of clients that the institution intends to
seek,
- Nature of planned financial resources: own funds, subsidies,
subordinated debt, deposits, borrowings, 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, broken down by category of staff,
- Location
of existing branches or planned branches,
- Planned
organization and resources, especially as regards accounting procedure 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.
(1) Audit procedures:
- Planned
internal audit organization for application of provisions of Article 43 of the
law on Banking and Financial Institutions,
- Identify
of proposed external auditors; nature of assignments gives to external
auditors.
Article
6:
Capital
contributors holding 5 percent or more of the capital or voting rights of the
institution must provide the following information:
(a) Identity of the capital contributor. In the case of a legal entity, indicate the business name, legal form, and address of the headquarters and furnish the Articles of Association. In the case of an individual, state his or her full name, date and place of birth, nationality and domicile. Indicate whether this person is to be appointed one of the managers of the institution. State whether the capital contributor is to be represented on the institutions board of directors, if so, ensure that this representative is not subject of the prohibitions laid down in Article 18 of the Law on Banking and Financial Institutions.
(b) Indicate the amount and percentage of the proposed participation and its equivalent in voting rights. Describe in detail the legal and financial arrangements for the acquisition of the securities. State whether the transaction is subject to particular formalities in respect of regulations such as those applicable to foreign particular formalities in respect of regulations such as those applicable to foreign direct investment in Cambodia and whether such formalities have been complied with.
(c) Describe the activities of the capital contributor. If the capital contributor is part of a group, provide a description of the main entities of said group together with an organization chart. Indicate whether the capital contributor has significant equity holdings in other credit institutions. Indicate whether the group to which the capital contributor itself belongs has significant equity holdings in credit institutions. If so, list such interests.
(d) State whether the capital contributor and the companies possibly associated with it carry on a financial activity. If so, indicate the regulations and the authorities to which they are subject in this respect.
(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 institution and how these relations are likely to develop in the future.
(i) Indicate the main banking relations of the capital contributor in Cambodia and how long these relations have existed.
Article
7:
A capital
contributor which will directly or indirectly hold at least 20 percent of the
capital or voting rights shall be considered as an influential shareholder in
accordance with the provisions of Article 26 of the Law on Banking and Financial
Institutions. Influential shareholders might be enjoined by the National Bank of
Cambodia to increase the net worth of the institution under the conditions
described in Article 27 of the Law on Banking and Financial Institutions. For
that purpose, a letter in accordance with the model set forth in Annex I must be
sent to the governor of the National Bank of Cambodia.
Such a
provision will only be removed once a deposit insurance scheme ( or other
customer deposit guarantee) is set up in Cambodia.
Moreover, in
accordance with the provisions of Article 40 of the Law on Banking and Financial
Institutions, the National Bank of Cambodia will be able to grant a written
waiver from the provisions of Article 7 at the time of the license
approval.
Chapter
III: License Approval and Related Fee
Article 8:
The National
Bank of Cambodia shall provide written notification of its decision within 6
months from the receipt of application. 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, the approval becomes void, except if
an extension has been requested and taken into consideration by the National
Bank of Cambodia.
Article
9:
An MFI
License is valid for a period of 3 years, from the approval date. Said license
may be renewed only if all possible infractions of relevant laws and regulations
have been remedied. An application for renewal of a license shall be submitted
to the National Bank of Cambodia at least two months prior to the expiration of
the existing license. In the event this deadline is not met, a fine
of KNR 10,000 per day of delay up
to the submission date shall be
imposed.
Article
10:
The institution shall pay a fee of KHR 50,000 upon submission of the application for a license.
Article
11:
An institution shall pay an annual license fee of KHR 1 million before January 15 of each year. For institution established during the year, the license fee shall be late calculated on a pro rata basis for the period remaining to the year's end. In the even of late payment of license fee, the institutions concerned shall be fined by paying interest on the overdue at existing refinancing interest rate for a period up 30 day. If they are not in after this period, their license shall be revoked.
Chapter IV: Prudential
Rules
Article
12:
Applicants or registrants with no operating history must pay up 100 percent of register capital into account open with NBC prior to commencement of operations.
Article
13:
Each licensed MFI shall maintain an amount, bearing no interest, equal to 5 percent of its registered capital in a permanent account with the NBC, including any licensed MFI, which has paid in its capital to the NBC as required by Article 12. A licensed MFI may withdraw the balance of such fund.
The NBC will only reimburse the capital deposit to a licensed MFI if it is voluntarily liquidated and has no deposit liabilities.
Article
14:
A licensed MFI shall deposit 5 percent of its deposit into account maintained with the National Bank of Cambodia. This reserve requirement shall be maintained under the conditions set forth in Regulation on reserve requirement.
Article
15:
A licensed MFI shall maintain a capital adequacy ratio (CAR) of at least 20 percent between "eligible capital" and its "weighted risks". Eligible capital will include, "core capital"(Tier 1), and "hybrid capital instruments" such as "non refundable subsidies" (public grants), "public guarantee funds to cover risks on credit to the clientele", and "perpetual subordinated debts" (elements of Tier II capital). The weighting of risks will be specified by Prakas.
Article
16:
A licensed MFI shall maintain a liquidity ratio of at least 100 percent.
This liquidity ratio shall be computed as follows:
w Numerator: cash in hand, plus deposits with NBC, plus deposits with banks, minus the amount owed to the NBC and banks (net liquidity), plus the portion of lending with not more than one month to run (excluding loans to customers with specified maturity),
w Denominator: a percentage of the time deposits due within the next month, plus a percentage of current accounts and of saving accounts. These percentages will be specified by Prakas.
Article 17:
A licensed MFI shall be in compliance with regulatory requirements concerning classification of the loan portfolio and the related level of loan loss.
Article
18:
Loan commitment aggregate to an individual borrower or to a group of borrower constituting a single beneficiary because of connections among themselves shall not exceed 10 percent of an institution's net worth.
Chapter V: Other
Provisions
Article
19:
All provisions, which are contrary to those of this Prakas, are hereby repeated.
Article 20:
The General Direction, the General Inspection, the Cabinet and all Departments of the
National Bank of Cambodia, and all institutions shall strictly implement this Prakas.
Article
21:
This Prakas shall have effect from this signing date.
Phnom Penh January 11, 2000
The GOVERNOR: CHEA CHANTO
Annexe I
Model Letter
to
be sent to the Governor of the National Bank of Cambodia
by
Capital Contribution Who Directly or
Indirectly Hold 20 Percent 0r
More of the Capital or Voting Right of an Institution.
In my capacity as (Indicate the status of the signatory), please find herewith the information requested by the National Bank of Cambodia (Prakas No ) with regard to the equity holding that (contributor's name) intends to take in (name of institution).
I hereby certify that this information is complete and accurate and that, to the best of my knowledge there are no other material facts of the National Bank of Cambodia should be informed.
I undertake the National Bank of Cambodia immediately of any change which would significantly alter the information provided.
I have taken note of the provision of Article 7 of the Prakas on licensing of micro-financing institution, pursuant to the National Bank of Cambodia may, where the situation requires, enjoin the influential shareholders of an institution to provide such institution with the support it needs.
Annexe II
CURRICULUM VITE
And
Questionnaire for individual who are, or who
propose to become
Managers of a Micro-Financing
Institution
1. Family name : .
2. Give name(s) :
3. Other name (s) by which you are or have been known : ..
..
4-1. Please describe the particular duties and responsibilities attaching to your position.
...
...
...
...
...
4-2. Indicate if you are a capital contributor to the applicant and if you intend to carry out, direct or through intermediary, personal or professional transactions with the applicant.
...
...
...
...
...
5. Your private address : ..
...
...
6. Your previous private address(es) during the last 5 years :
...
...
...
7. Your date (day/month/year) and place of birth (including district, town or city).
...
...
8. Your Nationality and how it was acquired (birth, naturalization, marriage).
...
...
9. Name(s) and address(es) of your banker within the last 5 years.
...
...
...
...
...
10. Your academic degree and/or professional qualifications and the place and year they were obtained.
...
...
...
...
...
...
11-1. You current occupation and employment and over the past 10 years, including the name and address of the employer in each case, the nature of the business, the position held and relevant dates.
...
...
...
...
...
...
...
11-2. Indicate whether you are or over the past ten years have been a significant shareholder (namely holding directly or indirectly at least 10 percent of the share capital or voting rights) in a company other than the applicant. If so, state the name and activities of such companies and the amount of your shareholding or interest in them.
...
...
...
...
...
...
...
...
...
11-3. Indicate, to the best of your knowledge,
which of the companies in which you have held or hold a position of
responsibility, or in which you have been or are a significant shareholder; has
or might soon have significant business relations with the
applicant.
...
...
...
...
12. Have you or any entity with which
are associated as a director, shareholder, or manager, ever held or applied for
a license or to carry on any business activity in any country? If so, if any
application was refused or withdrawn after it was or if any authorization was
revoked, give particulars.
...
...
...
...
...
13. Have you, or any with which you
have been involved in the conduct of its affairs, been disciplined, warned as to
future conduct, publicly criticized, or the subject of an investigation by any
regulatory authority or any professional body? If so give
particulars.
...
...
...
14. Have you, in any country, been
dismissed from any office or employment by your employer or barred from entry to
any professional or occupation? If so, give particulars.
...
...
...
15. Have you failed to satisfy any debt
adjudged due and by you under and order of court, or have you been declared
bankrupt by a court in any country or has a bankruptcy petition ever been served
on you? If so, give particulars.
...
...
...
16. Have you, in connection with the
management of any been adjudged by a court, in any country, to be legally liable any for any fraud, or
other misconduct by you toward such an entity or any of its members? If so, give
particulars.
...
...
17. Are you, now, or do you, other than
in a professional capacity, expect to be, engaged in any litigation in any
country? If so, give particulars.
...
...
18. Please supply an audited statement
of personal net worth proving a breakdown of your assets and
liabilities.
...
...
...
19. Indicate the names, addresses,
telephone number and positions of three individuals of good standing who would
be able to provide a reference on your personal and professional integrity. The
referees must not be related to you, and should have known you for at least five
years.
...
...
...
...
20. Is there any
additional information, which you consider to be relevant for the consideration
of your suitability for the position(s), listed in Question 4.1? The omission of
material facts may constitute the provision of misleading information (see
declaration below).
N.B.
The
information provided in response to this question shall be kept fully
confidential by the supervisory authority, the National Bank of Cambodia, except
in cases provided for by low.
DECLARATION
I am a ware that it is an offense to knowingly to the recklessly provide any false or misleading information in connection with an application for a banking license or a renewal of bank license.
I certify
that the information provided in response to the above question is complete and
accurate to the best of my knowledge, and that there are no other facts relevant
to his application of which the supervisory authority should be
aware.
Name :
Position
held :
Signed :
..
..Date
/