Reproduced: 2009 Lecturer: Chea Vannak,MBA Tel:

Course Outline Chapter1: An overview of Bank. Chapter2: Banking and Financial services. Chapter3: The Language and Documents of Banking. Chapter4: Depository. Chapter5: Commercial Bank services. Chapter6: Specialized Bank services. Reference: Bank Management & Financial Services, International Edition 2005

Chapter:1 An Overview of Banks I-Baking Industry Today We begin our study of this important industry and its financial services competitors, we should keep in mind the great forces that are reshaping both baking and the whole financial services sector. Banking has a profound effect on our lives, influencing the availability of jobs, the cost of living and our saving for future.  Consolidating  Globalizing

II-What is Baking? As important as baking are to the economy as a whole and to the local communities they call home, there is still much confusion about what exactly bank is? A bank can be defined in terms of -The economic functions it serves. -The services it offers its customers. -The legal basis for its existence.

III-Name of banking  Commercial Banks  International Banks  Saving Banks  Wholesale Banks  Cooperative Banks  Banker’s Banks  Mortgage Banks  Minority Banks  Community Banks  National Banks  Money Center Banks  State Banks  Investment Banks  Insured Banks  Merchant Banks  Member Banks  Affiliated Banks  Fringe Banks  Universal Banks  Retail Banks

-Commercial Banks: Sell deposits and make loans to business and individuals. -Saving Banks: Attract saving deposits and make loans to individuals and families. -Cooperative Banks: Help farmers, ranchers, and consumer acquire goods and services. -Mortgage Banks: Provide mortgage loans on new home and housing projects.

-Community Bank: are smaller, locally focused commercial and saving banks. -Money Center Banks: are large commercial banks based in leading financial center. -Investment Banks: Underwrite issues of new securities by their customer. -Merchant Banks: Supply both debt and equity capital to business. -International Banks: are commercial banks present in more than one nation.

-Wholesale Banks: Are commercial banks serving corporation and government. -Retail Banks: Are serving primary households and small business. -Banker’s Bank: Supply services to banks. -Monitory Banks: Focus on primary customers belonging to monitory group. -National Banks: Function under the federal charter through the comptroller of the currency

State Banks: Function under charters disused by banking commissions in the various states. -Insure Banks: Maintain deposit backed by federal deposit insurance plan. -Member Bank: Belong to federal reserve system. -Affiliation Banks: Are wholly or partially owned by a holding company.

-Fringe Banks: offer payday and title loans, cash checks or operate as pawn shops and rent-to-owned firms. -universal banks: offer virtual all financial services available in today’s marketplace.

Traditional Services offered by Banks. -Exchange of Currency -Commercial Notes and Loans -Offering saving deposit -Safekeeping of valuables -Supporting the government activities with credit -Checking Accounts. -Trust services.

Banking In Cambodia. NBC Central Bank Commercial Banks Specialized Banks Micro-Finance Institutions NBC Branches

NBC The central bank may open accounts on its books on behalf of -Stage agencies and instrumentalities of central government notable the National Treasury -Banks and financial institutions licensed by central bank -Foreign central bank, and public international finance institutions. The central bank may not open accounts for enterprise, including those owned by the state.

The Central Bank’s Function and Duties -To determine monetary policy objectives, in consultation with the Royal Government and consideration of the framework of the economic and financial policy of the kingdom -To formulate, implement and monitor monetary and exchange policies aimed at the determine objectives. -To conduct regular economic and monetary analysis, make public the results, and submit proposals and measures to Royal Government.

Con’t -To license, delicense, regulate and supervise banks and financial institutions and other relevant establishments such as as auditors and liquidators. -To oversee payments systems in the kingdom, and to enhance interbank payments. -To act as the sole issuer of national currency of the kingdom.

Con’t -To undertake and perform, in the name of the kingdom, transactions resulting from the participation of the kingdom in public international institutions in the banking, credit, and monetary spheres. -To establish the balance of payments. -To participate in the management of external debt and claims.

Con’t -To participate in the formation and supervise of the money and financial markets. -To license, delicense, regulate and supervise all those operating in the securities and foreign exchange markets, the market for precious stones and precious metals. -To set interest rates.

The Central Bank’s Management 1.The managing organ of the Central Bank is Board of Directors. -The Governor shall be Chairman of the Board. -The Board shall consist of 7 members, including:  The Governor  The Deputy Governor and  5 other members,

Con’t  One being a representative of the head of the Royal Government,  One a representative of the Ministry of Economy and Finance,  One a member from the real economy,  One an academic and one the representative of the National Bank staff.

Con’t -During their term of office, the Governor and the Deputy Governor, shall not be:  A public servant  A person serving as adviser of a public entity, or  A member of the Royal Government, or  A member of the National Assembly.

Con’t -The above restriction also applies to all other members except the representatives of the head of the Royal Government, the Ministry of Economy and Finance, and the academic who may maintain their civil services status.

2-The Board shall be responsible -Establish the policies for the operation of he central bank. -Issuing decisions, regulation circulars and other directives to govern the business of the central bank. -Establishing international rules and regulation. -Establishing staff status -Establishing department of the central bank -Establishing an audit committee -Establishing a staff training committee.

3-Capital, Income allocation A-Capital All the capital shall be subscribed and held exclusively by the royal government. B-Income The net income of the NBC for each year financial year shall be determined by the bank.

4-Financial Relations with public entities -Direct or indirectly extend credit to the RG. -Temporarily extend credit to the National Treasury. -Sell or purchase government securities.

5-Exchange arrangement and policy -Monetary gold -Foreign exchange -Bills of exchange -T-bills -Securities issued

6-Relations with Financial Institue The central bank is responsible for the licensing, delicensing and supervision of banks and financial institutions.

7-Clearing House -Clearing checks dominate in KHR -Clearing Checks dominate in USD -Clearing house’s Management -Clearing house’s operation committee.