The National Bank of Cambodia (NBC) has warned financial institutions not to accept national ID cards or family books as collateral in secured financings, or else face disciplinary action under Article 52 of the Law on Banking and Financial Institutions (LBFI).

The warning came in a February 10 letter from NBC director-general for banking supervision Rath Sovannorak addressed to heads of financial institutions – with emphasis on the banking and rural-credit sectors – just 163 days before the scheduled July 23 date of the general elections.

The letter stressed that these two types of government-issued documents have no economic value, and are to be used exclusively for identification and statistical purposes.

The NBC noted that this was not the first warning for financial institutions to immediately stop accepting the aforementioned documents as collateral for loans.

In fact, these warnings have been made for quite some time, confirmed Cambodia Microfinance Association (CMA) spokesman Kaing Tongngy, affirming that CMA members have “always” complied.

“This isn’t new. Over many years, no one has had the nerve to do so, since they’d face severe [fines and] punishments. None of the CMA members would do such a thing,” he reiterated, sharing that the association currently has 125 members.