According to the Asian Development Bank (ADB)’s announcement, it would be granting a US$10 million soft loan to develop and reform the Cambodian government’s financial system such as the establishment of a financial intelligence unit at the National Bank of Cambodia to combat money laundering, strengthening of supervision of the banking sector, installation of an IT system for central bank operation, and the development of a mechanism to resolve commercial disputes.
The latest reforms are part of the ongoing ADB second sector program support – which began in 2007 – to assist Cambodia to further develop its financial system.
In statement, Samiuela Tukuafu, Senior Financial Sector Specialist in ADB’s Southeast Asia Department said that “Cambodia has taken many positive steps to develop its financial sector since the instability of the 1970’s and 1980’s, but still faces policy gaps, capacity constraints and other challenges,”
“The ongoing program builds on earlier actions to improve the legal and regulatory environment, to boost sector capacity, to improve disclosure standards and financial transparency, and to build up infrastructure,” he added.
According to the statement, ADB’s loan from its concessional Asian Development Fund has a 24-year term, including a grace period of eight years, with an interest rate of 1% per year during the grace period and 1.5% for the rest of the term. The National Bank of Cambodia is the executing agency for the current program phase which runs from January 2009 to December 2009.
With the achievement of all reform milestones in the third subprogram, a fourth round of measures will be implemented starting in January next year, with the full sector program due for completion in December 2010, read statement.
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