Word on the street in Phnom Penh over the past few days is that another local bank has hit a bump in the road. On September 21, the National Bank of Cambodia stepped in, announcing a three-month temporary takeover of Chief Bank starting that very day. The central bank cited compliance shortcomings found during an inspection.
To get a handle on the situation, the NBC appointed audit firm Baker Tilly as the bank's temporary administrator. Over the next three months, Baker Tilly will dig deep into Chief Bank’s finances and operations, putting together a comprehensive report that regulators will use to figure out the bank's ultimate fate.
The administrator has been handed significant authority. To protect the bank's assets, Baker Tilly now holds the reins on daily operations, which includes temporarily freezing deposit withdrawals for account holders and putting a pause on non-essential running expenses. But if you took out a loan, don't expect any breathing room. Both officials and the official notice made it clear that borrowers must keep paying back what they owe on time, strictly according to their original contract.
In Phnom Penh, news like this travels fast. It is the main topic at roadside coffee stalls and cramped rental rooms across the city. For everyday people riding their motorbikes through the heat and traffic, hustling to save a few hard-earned dollars, hearing words like "takeover" or "frozen deposits" makes everyone's heart drop. The iced coffee keeps flowing and the motorbike exhaust keeps blowing, but workers holding their pay at the end of the day are definitely going to think twice about where they trust to keep their money.
