Due to political stability, economic policy and social consistency, Cambodia’s banking industry is booming and they were not affected badly by the global financial crisis in 2009. The growth of financial institutions in Cambodia, benefiting both individuals and society as a whole, will be a fundamental factor in ensuring the sustainability of Cambodia’s long term economic growth.
Cambodia’s economy analyst did not deeply concern over the world economic slowdown because Cambodia’s banking sector is not dependent on foreign financial resource. By the way, most of commercial banks operating in the Kingdom of Cambodia did not rely on loans from foreign banks and did not buy stock in the international market.
At the mean time, National Bank of Cambodia had doubled the reserve requirement for all commercial banks from 8 percent to 16 percent in an attempt to curb the inflation and avoid the global economic downturn.
The growth of financial institutions was a symptom of an increasing healthy Cambodian economy.
Tal Nay Im, Director General of NBC, said that so far, the banking sector in Cambodia has not been affected by the global financial crisis because banking system hasn’t been integrated into global banking. In fact, Cambodia’s banks have no stock market.
In order to avoid the world market crisis, Cambodia’s large commercial banks have begun competing with each other by increasing deposit rates, with the annual rate at several banks up to 8 percent in November. It is because of facing limited from outside lenders. Therefore commercial banks are seeking to bring in more local capital.