Cambodia sets strict capital requirements for new asset management firms

Cambodia sets strict capital requirements for new asset management firms

Cambodia’s central bank has established new conditions for the creation of asset management institutions, requiring applicants to hold a minimum registered capital of 200 billion riels (about $50 million).

The National Bank of Cambodia released an edict yesterday outlining a regulatory framework designed to manage non-performing loans and collateral held by the nation’s financial sectors. NBC Governor Chea Serey said the move aims to bring order to the acquisition and management of distressed assets from banks and financial institutions.

Under the new rules, anyone applying for an asset management licence must deposit % required capital into a central bank account before commencing operations. Serey said that the licences will be valid for five years and remain eligible for renewal, provided the institutions pay an annual fee of 50 million riels.

The edict permits these licensed firms to acquire non-performing loans and manage the associated collateral. They are also authorised to manage the immovable properties of debtors through court-ordered auctions, provisional administration, or liquidation processes. Additionally, the firms may provide debt collection services, facilitate the sale of collateral with a debtor’s consent, and trade loans with other financial entities.

However, the central bank has placed firm boundaries on the scope of these institutions. Serey confirmed that asset management firms are strictly prohibited from providing new loans, offering refinancing, or issuing loan guarantees. 

khmertimeskh