The National
Bank of Cambodia
00-05/PrK
LICENSING OF
RURAL CREDIT
SPECIALIZED
BANKS
______________
-
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:
Article 1:
Specialized
banks as defined in Chapter I of the Law on Banking and Financial Institutions
and in accordance with Article 14 of this law must obtain a license from the
National Bank of Cambodia (NBC) before starting business.
Article
2:
A licensed
rural credit specialized bank shall only carry out banking operations which are
specified by the terms of the decision granting the
license.
Article 3:
An applicant
for a specialized bank's license shall take one of the legal forms provided for
in Chapter III of the Law on Banking and Financial
Institutions.
Article 4
:
A
specialized bank shall have a minimum registered capital of KHR 10
billion.
Article 5:
The
application for a license shall be drawn up by a duly authorized person (manager
or person expressly empowered to such effect) and shall indicate the
following:
(a) Name or
business name of the institution
(b) Registered
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 to directing the policy of the
institution
(g) Capital
contributors which will hold 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 specialized
bank's business. These designated managers must fill in the curriculum vitae and
questionnaire appended in Annex II and furnish a copy of their police
records.
(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 prohibitions
set forth in Article 18 of the Law on Banking and Financial Institutions; the
majority of the members should have at least three years of credit
experience.
(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 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) Audit
procedures:
-
Planned
internal audit organization for application of provisions of Article 43 of the
Law on Banking and Financial Institutions,
-
Identity of proposed external auditors, nature of
assignments given 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 institution's board of directors; if so, ensure that
this representative is not subject to the prohibitions set forth 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 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 holding 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 the 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.
Article
8:
The National
Bank of Cambodia shall provide written notification of its decision within 3
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 and if no extension has been
requested, the approval becomes void.
Article
9:
A
specialized bank's 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 KHR 100,000 per day of delay up to the submission date shall be
imposed.
Article
10:
The
institutions shall pay a fee of KHR 500,000 upon submission of the application
for a license.
Article
11:
The annual
license fee shall be paid before January 15 as follows:
- KHR 10 million for the bank
headquarters.
- KHR 8 million for each branch of a
bank.
For
institutions established during year, the license fee shall be calculated on a
pro rata basis for the remaining period to the year's end. In the event of late
payment of license fee, the institutions concerned shall be fined by paying
interest on the overdue payment at the existing refinancing interest rate for a
period up to 30 days. If they are not in order after this period, their license
shall be revoked.
Article
12:
Applicants
with no operating history must pay up 100 percent of registered capital into an
account open with the NBC prior to commencement of
operations.
Article
13:
Each
licensed specialized bank shall maintain an amount, bearing no interest, equal
to 5 percent of its registered capital in a permanent account with the
NBC.
The NBC will
only reimburse the capital deposit to a licensed specialized bank if it is
voluntarily liquidated and has no deposit liabilities.
Article
14:
A licensed
specialized bank shall deposit S 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.
Article
15:
A licensed
specialized bank shall observe all the regulatory requirements to which banks
are subject, particularly the reporting requirements.
Article
16:
Notifications
relating to acquisitions or disposals of shareholdings in the context of Article
23 of the Law on Banking and Financial Institutions must include a description
of the reasons for the transaction and the objectives
pursued.
Notification
documents should also include information, as described in Article 6 above on
the capital contributors concerned.
In addition,
the specialized bank concerned shall pay a fee of 1 percent of share capital for
such a change in shareholdings.
Article
17:
Authorized
applications relating to acquisitions or disposals of shareholdings in the
context of Article 24 of the Law on Banking and Financial Institutions must
include a description of the reasons for the transaction and the objectives
pursued.
Application
documents should also include information, as described in Article 6 above, on
the capital contributors concerned. Contributors seeking to hold directly or
indirectly at least 20 percent of the share capital or voting rights may be
required by the NBC to sign a letter in accordance with the model given in Annex
I.
In addition, the specialized
bank concerned shall pay a fee of 1 percent of share capital for such a change
in shareholdings.
Article
18:
In the event
of the appointment of new managers (namely the two persons responsible for the
effective direction of the specialized bank's business) 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 position.
Article
19:
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 reasons for the planned operation and, as applicable, by the
following information.
‑
Extension or redefinition of activity: the information referred to in
paragraph k of Article 5 of this Prakas must be furnished;
‑
Capital reduction: description of terms and conditions, namely legal and
accounting arrangements 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 Articles of Association.
All these
changes must be submitted to the National Bank of Cambodia at least three months
before their enforcement.
Banks shall
pay a fee of KHR 1 million for a change of one page of the Article of
Association.
Article
20:
This Prakas
shall have effect from this signing date.
Article
21:
The General
Director, the General Secretariat, the General Cashier, the General Inspection,
all Departments of the NBC and all specialized banks under the NBC's supervisory
authority shall strictly implement this Prakas.
Phnom Penh
January 11, 2000
The
Governor: CHEA CHANTO
Annex
I
to be sent to the Governor of the National Bank of Cambodia by Capital Contributors Who Directly or Indirectly Hold 20 percent or more of the Capital or the Voting Rights of a Specialized Bank.
Dear
Sir,
In my
capacity as (give 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) has taken or intends to take in
(name of the specialized bank).
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 which the National Bank of
Cambodia should be informed.
I undertake
to inform the National Bank of Cambodia immediately of any change which would
significantly alter the information provided.
I have taken
note of the provisions of Article 7 of the Prakas on licensing of specialized
banks, pursuant to which the National Bank of Cambodia may, where the situation
requires, enjoin the influential shareholders of a specialized bank to provide
such a specialized bank with the support it needs.
Very truly
yours,
Signature
Annexe
II
Questionnaire
for individuals who are, or who propose to become,
Managers of
a specialized bank
__________
1. Family
name:
.......................................................................................................................……………
2. Given
name(s):
.......................................................................................................................……………
3. Other
name(s) by which you are or have been known:
.......................................................................................................................………………………………
....................................................................................................................…………………………………
4‑l. 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, directly or through an intermediary, personal or professional transactions with the applicant.
.......................................................................................................................………………………………
.......................................................................................................................………………………………
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 bankers within the last 5 years.
....................................................................................................................…………………………………
.......................................................................................................................………………………………
10. Your
academic degrees and/or professional qualifications and the place and year they
were obtained.
....................................................................................................................…………………………………
.......................................................................................................................………………………………
11‑1. Your
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 in 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) of 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 you 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 such application was refused or withdrawn after it
was made or if any authorization was revoked, give
particulars.
.......................................................................................................................…………………………….
...................................................................................................................………………………………..
13. Have you, or any entity 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 payable by you under an order of a 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.
1lave you, in connection with the management of any entity been adjudged by a
court, in any country, to be legally liable 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 providing a
breakdown of your assets and liabilities.
.......................................................................................................................……………………………….
.......................................................................................................................…………………………………………………………….
19.
Indicate the names, addresses, telephone numbers 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 is relevant for the
consideration of your suitability for the position of manager? The omission of
material facts may represent the provision of misleading information (see
declaration below).
N.B. The
information provided in response to this questionnaire shall be kept fully
confidential by the supervisory authority, the National Bank of Cambodia, except
in cases provided for by law.
DECLARATION
I am aware
that it is an offense to knowingly or recklessly provide any false or misleading
information in connection with an application for a banking license or a renewal
of a banking license.
I certify
that the information provided in response to the above questions is complete and
accurate to the best of my knowledge, and that there are no other facts relevant
to this application of which the supervisory authority should be
aware.
I undertake
to inform the supervisory authority of any changes material to the application,
which arise while the supervisory authority, is considering the
application.
Name:
.................................................................................………………………………
Position
held: ……………………………………..
Signed: …………………………………………… Date /
/