National Bank of Cambodia (NBC) governor Chea Chanto won Central Banker of the Year, Asia-Pacific award from premier financial magazine The Banker for his leadership in successfully navigating through a stormy 2020 during the Covid-19 crisis.

The periodical, owned by London-based Financial Times Group, said the Kingdom managed the health crisis created by the coronavirus well, with fewer than 400 cases confirmed and zero deaths recorded to date.

The Banker said: “Despite these conditions, Cambodia is forecast to see [minus] 1.9 per cent growth in gross domestic product [GDP] during 2020 . . . remarkable considering the hardships the country has faced.

“Following the impact Covid-19 and flooding have had on businesses, the central bank stepped up to help out companies experiencing financial hardship.

“The NBC informed the Association of Banks in Cambodia and the Cambodia Microfinance Association [CMA] that loan restructuring measures introduced in March 2020 will continue until the end of June 2021.

“Restructuring is permitted up to three times without any impact to the loan classification during the extension period. Further provisions include the reduction of interest rates and waiving fees. The measures taken mean the country’s rate of non-performing loans has remained low at around 2.5 per cent.”

According to the CMA, as of the end of November, more than 290,000 clients affected by Covid-19 had applied for credit restructuring from the association’s 103 member microfinance institutions (MFIs).

More than 270,000 of these clients have been approved by their MFI to restructure loans collectively totalling more than $1.3 billion.

Shin Chang-moo, president and CEO of South Korea-owned Phnom Penh Commercial Bank Plc (PPCBank), pointed out that the recognition is well-deserved, especially for the NBC’s leading role in sustaining the national economy during the pandemic.

He said: “This is a great achievement for [Chanto] and also very encouraging news for NBC and Cambodia. NBC was also very supportive of the banking industry, easing regulatory requirements to provide extra liquidity to lenders of restructured loans.

“These were very reasonable and commercially relevant measures to promote the supply and demand sides of the credit market.”

On October 28, the NBC officially launched the Bakong interbank blockchain-based payment platform in a bid to enable interoperability between banks and financial institutions that is safe, efficient and cost-effective, and gives a powerful impetus to rural financial sector development and nurture financial inclusivity.

The Banker said: “Cambodia has also stayed on track with the promotion of digital banking. The NBC launched a digital currency, Bakong, in October 2020 to help promote financial inclusion, as many companies still pay employees in cash.

“The country’s fiat currency has also been promoted this year, as Mr Chanto called for greater use of the Cambodian riel, stating it will be a way to encourage sustainable growth and develop an effective banking system, away from a dependence on the US dollar.

“Low-denomination dollar notes have begun to be phased out of circulation and transactions under $100 are now to be conducted in riel.”

With Cambodia in the midst of a digital transformation in its financial service industry, PPCBank’s Shin said nationwide infrastructure should be the key enabler of this important agenda item.

He said: “In Cambodia, it is true that we are behind most of the world in that sense, but I am confident that we are on the right track to catch up quickly, and, with some pioneering infrastructure such as Bakong, Cambodia is leading the region and even presents an example of a revolutionary payment platform led by a central bank on the global scene.”

At the same time, Cambodian Public Bank (CPB) was also again honoured with “The Bank of the Year Award 2020” for Cambodia by The Banker.

The publication said: “This is the 12th time Cambodian Public Bank has won this award since 2001. The award is a further testimony of [CPB’s] continued commitment to banking excellence, prudent management and customers’ confidence towards the bank.”

As of December 31, 2019, there were 47 commercial banks consisting of 17 local banks, 17 subsidiaries and 13 foreign branch banks, according to the NBC.

In addition, there were 15 specialised banks, seven microfinance deposit-taking institutions, 76 microfinance non-deposit taking institutions, 245 rural credit institutions and 15 financial leasing companies.

In its “Macroeconomic and Banking Progress 2019 Report and 2020 Outlook”, the NBC said deposits and outstanding loans in 2019 rose sharply by 25 and 26 per cent respectively over the previous year.

Outstanding loans reached $19.6 billion and deposits with Cambodia’s seven money deposit-taking institutions (MDI) reached $22 billion in 2019.