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Cambodia’s financial sector fully implements flagship code of conduct for industry protection

Cambodia Investment Review

The Association of Banks in Cambodia (ABC), Cambodia Microfinance Association (CMA), and Cambodian Association of Finance and Technology (CAFT) have officially put into full implementation the Banks and Financial Institutions’ Code of Conduct.

This marks the end of a nearly one-year interim implementation period, during which the associations have worked to disseminate and strengthen the code among their members.

Read more: Cambodia’s finance industry launch new self-regulatory guidelines

The code of conduct is a set of guidelines and principles aimed at promoting ethical and professional conduct among banks and financial institutions in Cambodia. It is intended to enhance integrity, trust and transparency in the financial sector, and to protect investors and consumers from harmful practices.

Senior members of the banking and finance industry welcomed in the fully implementation of the code.

The code was initiated and adopted in line with the National Financial Inclusion Strategy 2019-2025, which aims to promote sustainable development and resilience in the financial sector, as well as to enhance consumer and investor protection and professionalism.

According to the Navigating New Normal report released in December 2022, the Cambodian Finance Sector performed surprisingly well during the pandemic, helped in large part by very sensible Government and National Bank of Cambodia actions and policies with loans growing around 20% per annum as total loans rose over $45 billion and total deposits over $38 billion.

Building trust and integrity in the banking sector

Speaking at the Workshop on Orientation and Reinforcement of the BFIs’ Code of Conduct, Mr. Raymond Sia, Chairman of the Association of Banks in Cambodia, emphasized the importance of the code in building trust and integrity in the banking sector.

“In the financial industry, the behavior and actions of BFIs’ colleagues are crucial as the sector’s fundamentals are built on integrity and trust with customers and the public,” said Sia. “As financial industry professionals, we need to reinforce these values and strive for excellence in everything we do.”

Mr. Raymond Sia, Chairman of the Association of Banks in Cambodia,

During the interim implementation period, the associations have conducted a series of workshops and other educational events to disseminate the code and help members understand its requirements.

Read more: Raymond Sia on collaboration, cooperation and capacity building for Cambodia’s banking association

These have included regional workshops for members, mainly for branch managers across the country to strengthen their capacity, efficiency, sustainability, ethics, and professionalism. More than 800 MFIs’ Branch Managers across the country have attended these workshops.

A mechanism to monitor the implementation

Chairman of Cambodia Microfinance Association, Mr. Sok Voeun, highlighted that for nearly one year of interim implementation, CMA has disseminated and strengthened the BFI’s Code of Conduct by conducting regional workshops for members. He said, “We observed that the three associations’ members have made efforts to comply with the rules of the Code of Conduct.”

“Although it is not easy, for the efforts to contribute to the strengthening of the banking system and investor and consumer protection, all institutions strive to improve their systems and policies to ensure that their institutions fully comply with the rules set out in the Code,” he added.

Chairman of Cambodia Microfinance Association, Mr. Sok Voeun.

In addition to the workshops, the associations have also established a mechanism to monitor the implementation of the code, to ensure that all members are implementing it in a transparent, accountable, and responsible manner.

Read more: Sok Voeun on ensuring the prosperity and sustainability of Cambodia’s microfinance sector

This includes regular reporting and monitoring of member compliance, as well as the establishment of an independent body to investigate and address any reported violations of the code.

Participation and commitment from all stakeholders

Speaking to more than 600 attendees at the BFIs’ Code of Conduct Workshop, Mr. Kith Sovannarith, 1st Deputy Director General of Banking Supervision at the National Bank of Cambodia, applauded the three associations for initiating and adopting the BFI’s Code of Conduct and Lending Guidelines.

He said, “It is a remarkable achievement to maintain the stability of the Banking and Financial sector and build trust among investors and the public. We appreciate BFIs for participating in the adoption of the BFIs’ Code of Conduct and Lending Guidelines in order to provide financial products and services responsibly, ethically, and in the best interest of investors and consumers.”

Mr. Kith Sovannarith, 1st Deputy Director General of Banking Supervision at the National Bank of Cambodia.

Mr. Kith went on to stress the importance of continued participation and commitment from all stakeholders, including banks and financial institutions, in maintaining the stability and sustainability of the banking sector.

Read more: Cambodia’s microfinance association emphasizes sustainable growth as total lending portfolio hits $9.1B

“To maintain the stability and sustainability in the development of the banking sector, the strengthening market conduct and the strengthening market conduct and investor and consumer protection demands full participation from all stakeholders, especially, Banks and Financial Institutions,” he said. “I urge all financial institutions to prioritize investor and consumer protection and to ensure that all competition and operations are performed professionally and responsibly.”

Will benefit the overall financial system and economy

The implementation of the Banks and Financial Institutions’ Code of Conduct is a significant step forward in promoting ethical and professional conduct in the Cambodian financial sector.

By establishing a clear set of guidelines and principles for banks and financial institutions to follow, and by providing ongoing education and support to members, the associations are helping to create a more transparent, accountable, and responsible financial sector that is better able to serve the needs of investors and consumers, and promote sustainable economic growth.

Over 100 of the banking and microfinance members attended the event.

It is important to note that the Code of Conduct will not only benefit the financial institutions and their customers but also the overall financial system and economy. It will ensure a more transparent and fair market environment, which will promote public trust in the financial sector.

Furthermore, it will also enhance the reputation of Cambodia’s banking and financial sector at the international level, making it more attractive to foreign investors.

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