National Bank of Cambodia (NBC)

Overview

The National Bank of Cambodia (NBC) is Cambodia's central bank and the primary monetary and supervisory authority responsible for banking regulation, payment systems oversight, microfinance supervision, and digital currency/fintech governance. The NBC's mission is to determine and direct monetary policy aimed at maintaining price stability to facilitate economic development within Cambodia's economic and financial policy framework.

Established as an autonomous institution with operating autonomy under the Law on the Organization and Conduct of the National Bank of Cambodia, the NBC serves as:

• The sole issuer of the Khmer riel (KHR)

• The licensing and supervisory authority for all banks and financial institutions

• The regulator of payment service providers and microfinance institutions

• The architect of Cambodia's digital payment infrastructure (notably the Bakong system)

As of December 2024, the NBC supervises a banking system comprising 59 commercial banks, 9 specialized banks, 89 microfinance institutions, 13 financial leasing institutions, 4 third-party processors, and 30 payment service providers.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Supervisory Scope

The NBC maintains comprehensive supervisory jurisdiction over:

Deposit-Taking Institutions:

• Commercial banks (59 licensed)

• Specialized banks (9 licensed)

• Microfinance deposit-taking institutions (89 licensed)

• Financial leasing institutions (13 licensed)

Regulated Activities:

• Credit provision and lending activities

• Deposit-taking from the public

• Payment processing and settlement

• Currency exchange services

• Securities brokerage and custody (where applicable)

• Trade financing and letter of credit operations

Supervisory Methods

The NBC employs a risk-based supervisory approach combining:

1. On-Site Inspections — Regular examinations of licensed institutions to assess compliance, capital adequacy, asset quality, management capacity, earnings, and liquidity

2. Off-Site Monitoring — Continuous analysis of prudential returns, financial reports, and regulatory filings to identify emerging risks

3. Risk-Based Capital Requirements — Prudential standards aligned with international best practices, including capital adequacy ratios and liquidity coverage requirements

4. Periodic Reporting Requirements — Mandated submission of financial statements, prudential returns, compliance reports, and other regulatory filings on specified schedules

Prudential Standards

Requires verification from official sources The NBC establishes binding prudential requirements including:

• Minimum capital and reserve requirements

• Loan classification and provisioning standards

• Liquidity coverage and asset quality standards

• Concentration risk limits

• Related-party transaction restrictions

• Connected lending limits

Regulatory Framework

Consumer protection in Cambodia's financial sector is governed by:

• Banking Code 2011

• Law on Banking and Financial Institutions

• AML/CFT regulations

• NBC prudential and conduct standards

• Prakas on consumer protection and dispute resolution

Deposit Protection

Requires verification from official sources The NBC maintains a deposit insurance mechanism protecting customer deposits held at licensed banks and deposit-taking institutions. Details of coverage limits, eligible deposit types, and claim procedures are established through NBC regulations.

Know-Your-Customer (KYC) and Anti-Money Laundering (AML)

The NBC enforces comprehensive KYC and AML compliance under the Law on Anti-Money Laundering and Combating the Financing of Terrorism (2020). Key requirements:

Customer Due Diligence Obligations:

• Undertaken when establishing business relations

• Triggered for occasional/one-off transactions exceeding KHR 40 million (approximately USD 10,000)

• Required for wire transfers exceeding KHR 4 million (approximately USD 1,000)

• Mandated upon suspicion of money laundering or terrorist financing

• Required when doubts exist regarding customer identification data accuracy

Risk-Based Approach:

• Tiered customer due diligence scaled to transaction risk profile

• Basic phone number registration for low-risk transactors

• Full identity verification for higher-risk activities

• Enhanced due diligence for politically exposed persons (PEPs) and high-risk jurisdictions

Record-Keeping:

• Comprehensive records of customer data and transactions required

• Minimum retention period of 5 years

• Audit-ready documentation for regulatory inspection

Complaint Resolution and Dispute Mechanisms

Requires verification from official sources Licensed institutions must maintain internal complaint procedures for customer disputes. The NBC receives and investigates consumer complaints regarding regulatory violations and may require restitution or corrective action by regulated institutions.

Transaction Limit Framework

Cambodia's fintech regulations establish tiered transaction limits based on customer verification:

• Basic registration: Limited daily/monthly transaction thresholds

• Full KYC verification: Expanded transaction limits

• Enhanced verification: No specified limits (subject to prudential caps)

Regulatory Powers

Legal Authority

Under the Law on Banking and Financial Institutions and related statutes, the NBC possesses binding enforcement authority to:

1. Supervisory Actions

• Issue cease-and-desist orders

• Require remedial action plans

• Impose heightened supervision and monitoring

• Require divestiture of non-conforming assets

• Restrict dividend payments and capital distributions

1. Licensing Actions

• Deny or condition license applications

• Suspend licenses for specified periods

• Revoke licenses for material violations

• Impose licensing restrictions or probationary conditions

1. Financial Penalties

• Impose monetary fines for regulatory violations

• Require restitution to customers or beneficiaries

• Assess penalties proportionate to violation severity and financial capacity

1. Management Actions

• Requires verification from official sources Require removal of management or board members for competency or integrity deficiencies

• Appoint conservators or receivers in cases of institutional distress

• Establish governance or operational remediation requirements

Sanctions Regime

The NBC enforces compliance with the Law on Anti-Money Laundering and Combating the Financing of Terrorism through the Cambodia Financial Intelligence Unit (CAFIU), functioning as the NBC's AML/CFT secretariat. Sanctions enforcement occurs through court-ordered asset freezes and property seizure for designated persons and entities.

Requires verification from official sources Recent penalties for violations include:

• Violations of AML/KYC requirements: Escalated sanctions and potential license revocation

• Cyber fraud and scam facilitation: Under Cambodia's 2026 Anti-Technology Fraud Law, penalties include fines up to USD 250,000 and imprisonment of 2-5 years

• Transaction processing violations: Fines and operational restrictions proportionate to violation severity

Violation Investigation and Remediation

The NBC's Inspection General office investigates alleged violations through on-site examinations, document review, and interviews. Institutions receive notice of violations and opportunity to respond before enforcement action is taken. Remediation timelines are established based on violation severity.

Regulatory Role and Function

Legal Foundation

Statutory Framework

The NBC's authority derives from multiple foundational statutes:

1. Law on the Organization and Conduct of the National Bank of Cambodia — Establishes the NBC's institutional structure, operational autonomy, and core mandates. The NBC is empowered to issue licenses, regulations (prakas), circulars, instructions, and other normative documents.

2. Law on Banking and Financial Institutions (1999) — Defines banking operations and establishes the comprehensive regulatory framework for:

• Provision of all types of credit to the public

• Receiving of non-earmarked deposits from the public

• Processing and provision of payment methods in national or foreign currency

1. Law on Anti-Money Laundering and Combating the Financing of Terrorism (2020) — Establishes AML/CFT compliance requirements and designates the NBC as the regulatory body for financial institution compliance.

2. Law on Combating the Financing of Weapons of Mass Destruction Proliferation (2020) — Establishes WMD financing controls and compliance obligations for regulated entities.

3. Prakas (Regulations) — The NBC issues subordinate prakas governing specific regulatory matters including licensing conditions, prudential requirements, reporting standards, and operational conduct.

Regulatory Powers

Under binding legal authority, the NBC may:

• License and delicense banking and financial institutions

• Issue regulations, guidelines, and supervisory directives

• Conduct on-site inspections and off-site monitoring

• Impose enforcement actions and sanctions for violations

• Set prudential and operational standards

• Establish licensing conditions and competency requirements

• Regulate payment systems and digital financial services

Requires verification from official sources The NBC reports to the National Assembly and Royal Government on implementation and results of its monetary policy mission.

Licensing and Authorization Relevance

Bakong Central Bank Digital Currency (CBDC)

The NBC has clarified that Bakong functions as a blockchain-based payment system backbone rather than a traditional central bank digital currency (CBDC). Key attributes:

• DLT Architecture: Built on Hyperledger Iroha distributed ledger technology

• Issued Value: Represents tokenized commercial bank deposits, not direct NBC liabilities

• Dual Currency: Operates in both KHR and USD

• Cross-Border Potential: Framework designed to support regional and international payment integration

Requires verification from official sources The NBC continues to explore technical standards and regulatory frameworks for potential future CBDC enhancements.

Digital Asset Regulation (2025)

In January 2025, the NBC published Cambodia's first comprehensive digital asset regulatory rules, establishing a two-tier classification system:

Group 1 Assets (Lower Risk):

• Qualifying stablecoins

• Tokenized securities

• Asset-backed digital instruments

• Regulation aligned with Basel Committee guidance

Group 2 Assets (Higher Risk):

• Cryptocurrencies without asset backing (Bitcoin, Ethereum, etc.)

• Speculative digital tokens

• Non-stablecoin crypto assets

Regulatory Approach:

• Banks and payment service providers may custody and facilitate transactions in Group 1 assets

• Strict limitations on Group 2 asset handling

• Enhanced compliance and risk management requirements

Regulatory Sandbox and Innovation Policies

The NBC has introduced a regulatory sandbox framework allowing fintech companies to test innovative financial services under controlled NBC supervision. Requires verification from official sources Sandbox participants operate under temporary licenses with specified pilot parameters and reporting requirements.

Fintech Licensing and Compliance

The NBC issues licenses for fintech service providers offering:

• Digital payment services

• Mobile money operations

• Crypto asset custody and trading platforms

• Blockchain-based financial services

• Distributed ledger technology implementations

All fintech licensees must comply with NBC's prudential, AML/CFT, and operational standards applicable to comparable traditional financial institutions.

Payments and Money Movement Relevance

Regulatory Scope

The NBC exercises direct supervisory authority over Payment Service Institutions (PSIs), defined to include entities providing:

• Payment system operation and infrastructure

• Payment processing and clearing services

• Money transfer services

• Payment gateway and aggregation services

• Digital wallet and e-money services

Licensing Framework

Payment service providers must obtain NBC licensing before commencing operations. As of December 2024, 30 payment service providers operate under NBC supervision, regulated through standardized licensing and prudential requirements.

Bakong Digital Payment System

The NBC launched Bakong in October 2020, a blockchain-based distributed ledger technology (DLT) payment system developed in partnership with Japanese fintech company Soramitsu using the open-source Hyperledger Iroha framework. Requires verification from official sources Key characteristics:

• Nature: Bakong is a tokenized deposit payment system (not a cryptocurrency), where user balances are backed by conventional bank money held at participating financial institutions

• Currency Support: Facilitates transactions in both Khmer riel (KHR) and US dollars (USD)

• Adoption: As of 2024, more than 65% of Cambodia's population uses Bakong; in 2024 alone it facilitated transactions worth USD 104.81 billion (approximately 330% of Cambodia's GDP)

• Regional Integration: Bakong has been integrated into regional payment systems and cross-border settlement mechanisms

• Governance: The NBC establishes operational standards, security protocols, and participation requirements for Bakong participants

KHQR Initiative

The NBC oversees the KHQR (Khmer Quick Response) standard for QR code-based domestic payments, promoting financial inclusion and reducing cash-based transactions. Requires verification from official sources

Payment Systems Governed or Overseen

The NBC operates and/or oversees the national payment and settlement infrastructure of Cambodia. Specific systems include:

Relationship to Other Regulators

Regional Payment Integration

The NBC actively participates in regional payment system integration initiatives:

• ASEAN Coordination: Collaboration with ASEAN central banks and payment authorities

• Bakong Cross-Border Pilot: Bilateral agreements with regional partners for Bakong integration

• CIPS Participation: Potential integration with China's Cross-Border Interbank Payment System Requires verification from official sources

International Standards Compliance

The NBC aligns regulatory frameworks with:

• Basel Committee on Banking Supervision guidance on capital adequacy and prudential regulation

• Financial Action Task Force (FATF) standards on AML/CFT compliance

• IMF technical assistance on monetary policy and financial stability

• BIS standards on payment systems and settlement

AML/CFT International Cooperation

The NBC participates in international AML/CFT networks:

• Cambodia Financial Intelligence Unit (CAFIU) operates as FIU member of the Egmont Group

• Cross-border information sharing on suspicious transactions

• Coordination with foreign financial intelligence units

• Requires verification from official sources Participation in FATF mutual evaluation and compliance monitoring

Sanctions Regime Coordination

The NBC enforces compliance with:

• United Nations Security Council sanctions

• Multilateral sanctions regimes

• Cambodia-specific targeted financial sanctions

• FATF-designated high-risk jurisdictions designations

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Headquarters and Contact Information

National Bank of Cambodia (NBC)

• Address: #88 Street 102 Corner Street 19, Sangkat Wat Phnom, Khan Daun Penh, Phnom Penh, Cambodia

• Telephone: +855-23-722-563, +855-23-722-221

• Email: [email protected]

• Website: https://www.nbc.gov.kh/english/

• Khmer Website: https://www.nbc.gov.kh/

Leadership

Governor: H.E. Dr. Chea Serey (first female governor of NBC)

Organizational Structure: Board of Directors (7 members including Governor, Deputy Governor, and 5 representatives from government, economic sector, and higher education); Five operational divisions: Secretariat General, Directorate General, Directorate General Supervision, Inspector General, and Cash General

Supervisory Divisions and Contact Points

Supervision Department:

• Commercial Banks Supervision: https://www.nbc.gov.kh/english/supervision/commercial_banks.php

• Payment Service Institutions: https://www.nbc.gov.kh/english/supervision/payment_service.php

Payment Systems and Banking Institutions:

• Banking Institutions: https://www.nbc.gov.kh/english/payment_systems/banking_institutions.php

Cambodia Financial Intelligence Unit (CAFIU):

• AML/CFT Enforcement and International Coordination

• Website: https://cafiu.gov.kh/en/

Key Regulatory Resources

Legislation Portal:

• Laws Applicable to Banks and Financial Institutions: https://www.nbc.gov.kh/english/legislation/laws_applicable_to_banks_and_financial_institutions.php

• Law on Banking and Financial Institutions (1999): https://www.nbc.gov.kh/download_files/legislation/laws_eng/86004-Law-on-Banking-and-Financial-Institutions-1999.pdf

• Law on the Organization and Conduct of the NBC: https://www.nbc.gov.kh/download_files/legislation/others_law_eng/law_on_the_organization_and_conduct_of_the_nbc.pdf

News and Announcements:

• NBC News and Events: https://www.nbc.gov.kh/english/news_and_events/news.php

Frequently Asked Questions:

• FAQs: https://www.nbc.gov.kh/english/about_the_bank/faqs.php

NBC Branches

Regional branch offices operate throughout Cambodia. Branch locations and contact information available at: https://www.nbc.gov.kh/english/about_the_bank/nbc_branch.php

Notes on Naming and Language