The National Bank of Cambodia (NBC) has publicly assured customers that all bank accounts remain secure and accessible. This statement follows recent US and UK sanctions against Prince Bank, its parent company Prince Holding Group, and its majority shareholder Chen Zhi.
The central bank emphasized that financial institutions in Cambodia are legally required to maintain sufficient liquidity. This ensures they can meet all customer withdrawal demands, even during periods of increased concern.
Key Takeaways
- National Bank of Cambodia confirms all customer accounts are secure.
- Cambodian banks must hold enough cash for withdrawals.
- Sanctions target Prince Bank, its parent company, and shareholder.
- Prince Bank is reviewing sanctions and working with authorities.
- Some customers reported delays in US dollar transactions.
NBC Addresses Sanctions and Public Concern
The NBC issued its statement on a Saturday, four days after the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the UK Foreign, Commonwealth and Development Office (FCDO) imposed sanctions. These actions targeted Prince Bank, its parent company Prince Holding Group, majority shareholder Chen Zhi, and 143 other entities and individuals. The sanctions were imposed due to alleged illegal activities.
The central bank confirmed it is conducting a thorough review to ensure Prince Bank complies with Cambodian laws. It also stated that measures are in place to keep customer accounts operating normally and to safeguard customer funds.
Important Fact
The US and UK sanctions were imposed on 146 entities and individuals, including Prince Bank, its parent company, and its majority shareholder.
Increased Withdrawals and Bank Reassurance
The NBC noted an increase in withdrawals from Prince Bank and other institutions in recent days. This was due to customer concerns following the sanctions announcement. However, the central bank reiterated that Cambodia’s financial sector operates under strict regulations. These regulations ensure that banks maintain adequate cash liquidity to fulfill all withdrawal requests.
“The Board would like to assure the public that Prince Bank maintains adequate liquidity and is fully solvent. To our customers: your deposits and financial interests remain secure,” Prince Bank stated in response to concerns.
Prince Bank also announced on Friday that it had engaged international legal counsel. This counsel will conduct a comprehensive review of the sanctions, which the bank described as “extremely serious.” The bank confirmed it is working closely with authorities to develop a clear plan for its removal from the sanctions list.
Background on Sanctions
Economic sanctions are penalties imposed by one country or group of countries on another. They aim to influence behavior, often related to national security or foreign policy. These sanctions can target specific individuals, entities, or entire sectors of an economy.
Customer Experiences and Bank's Response
Despite official reassurances, some customers voiced frustration on Prince Bank’s Facebook page. They reported delays or failures in US dollar transactions. Many expressed fear that their funds might be frozen because of the sanctions.
- One customer wrote, “When will my hard-earned money come back?”
- Another stated, “I’ve been sending money since 7am on the 16th, and it’s been over 24 hours, I haven’t seen any money credited to my account.”
In response to these specific complaints, Prince Bank maintained that its operations, including mobile applications and ATMs, were functioning normally. The bank also asserted that its financial position remained sound and that customer deposits were secure.
The situation highlights the impact of international sanctions on local financial operations and public trust. Both the central bank and Prince Bank are working to stabilize the situation and reassure the public.
The Cambodian financial system is designed with safeguards to prevent widespread disruption. These include strict liquidity requirements for all licensed institutions. This regulatory framework is crucial in maintaining stability during challenging times.
The ongoing review by the National Bank of Cambodia aims to ensure full compliance with national laws. This process is critical for maintaining the integrity of the banking sector and protecting customer assets.
International legal efforts by Prince Bank are focused on addressing the specific issues raised by the US and UK sanctions. This includes developing a clear strategy to navigate the complex regulatory landscape and seek removal from the sanctions list.
The incident underscores the importance of transparent communication from financial institutions during periods of uncertainty. Clear information helps to manage public expectations and reduce anxiety among depositors.
Financial stability is a key priority for the National Bank of Cambodia. Its proactive statements and ongoing oversight demonstrate a commitment to safeguarding the country's economic infrastructure.
