On March 27, 2020, the National Bank of Cambodia (NBC) issued a directive to all banks and financial institutions to restructure loans in order to maintain financial stability, support economic activity, and ease the burden of debtors facing major revenue declines who may find it difficult to repay loans during the ongoing COVID-19 outbreak.
This directive requires banks and financial institutions to establish a policy and procedure on loan restructurings amid the COVID-19 outbreak, and have it approved by the board of directors. The banks and financial institutions must also pay close attention to clients, with particular attention given to clients engaged in the following sectors:
The directive recommends that banks and financial institutions verify that:
In restructuring a loan, banks and financial institutions may:
Banks and financial institutions are also required to closely monitor restructured loans and provide monthly reports to the NBC. The reports must include the following information:
The directive further requires that loan restructurings be carried out by a separate team from the department in charge of processing the loan. The team must regularly review clients’ loan portfolios and how they are impacting clients’ financial positions.
For more information on compliance obligations for your loan portfolio, restructuring your loans, or any other aspect of banking and finance law in Cambodia, please contact Tilleke & Gibbins on [email protected].