Prakas On Conditions For Asset Management Institution

Non-performing loans (“NPLs”) in Cambodia have risen in recent years, with the NPL ratio having reached 8.1% in June 2025, according to ASEAN+3 Macroeconomic Research Office (“AMRO”). Given the rise NPLs, various policy measures have been introduced and certain recovery strategies have been pursued by banks on an individual basis. However, NPLs still continue to increase, highlighting the need for a more effective NPL resolution framework to be in place to safeguard financial stability by enabling banks to offload distressed assets from banks’ balance sheets and ensure that these assets are managed effectively. To address this, the National Bank of Cambodia (“NBC”) issued Prakas No. B37-026-113 Prokor on Conditions for Asset Management Institutions on 19 February 2026 (the “Prakas”) with the aim of establishing a regulatory framework governing Asset Management Institutions (“AMIs”) and the acquisition and management of NPLs and collateral held by banks and financial institutions (“BFIs”). The Prakas sets out the rules for the licensing, governance, and operations of AMIs and BFIs in relation to acquisition and management of the NPLs and collateral held by BFIs (“Associated Collateral”).

1. SCOPE OF APPLICATION

The Prakas is applicable to AMI and BFIs under the NBC’s supervision.

For the purposes of the Prakas:

• AMI refers to an institution that is licensed by the NBC to operate in accordance with the regulatory framework of the Prakas.
• Associated Collateral refers to assets or other rights directly attached to NPLs, including, but not limited to, immovable properties, movable properties, and any other assets, whether held by the debtor or a related third party.
• NPLs refers to loans that are classified as “sub-standard”, “doubtful”, or “loss”, in accordance with the Prakas No. B7-017-344 Prokor on Credit Risk Grading and Impairment Provisioning issued by the NBC on 1 December 2017.
• NPL Management refers to the process of resolving NPLs through various methods, including debt recovery, debt transfer, debt to equity conversion, debt restructuring or by other means with the approval of the NBC.

2. GOVERNING AUTHORITY

The NBC is the governing and licensing authority in respect of the AMIs.

3. PERMITTED AND PROHIBITED ACTIVITIES OF AMI

The Prakas clearly sets out the permitted and prohibited activities of licensed AMIs as follows:

4. LICENSING APPLICATION PROCEDURES, VALIDITY PERIOD AND ANNUAL FEE

(a) Licensing Application Procedures

• Any person applying for an AMI license must register as a Public Limited Company and submit the required documents as specified in Article 8 of the Prakas.
• An AMI is required to have a minimum registered capital of KHR 200,000,000,000 (approximately USD50,000,000). Furthermore, it is required that prior to commencing operations, 100% of an AMI’s registered capital must be paid into an account maintained with the NBC, alongside a deposit of 5% of its registered capital as a capital guarantee.
• Any BFIs, intending to hold shares (either directly or indirectly) in an AMI is required to obtain prior written approval from the NBC.
• The Board of Directors must have a minimum of five members with at least two independent directors. Any appointment of a director or member of senior management is subject to prior approval from the NBC.

(b) Licensing Validity and Annual Fee:

• The license is valid for a period of five years and is renewable.
• An application for a renewal of a license must be submitted at least six months prior to the expiration of the license.
• An AMI is required to pay an annual license fee of KHR 50,000,000 (approximately USD12,500) before 15^th January of each year.

5. PROCEDURES FOR NPL TRANSFER

• BFIs must obtain prior NBC approval before selling any NPLs to an AMI.
• Upon the sale of NPLs to the AMI, the BFIs must transfer all related original loan documents including loan agreements, collateral documents and repayment histories to the AMI and officially notify the customers and the credit reporting service provider regarding the NPLs transfer.

• Upon the acquisition of an NPL, an AMI has the right to enforce claims against the debtor and any guarantor, acquire collateral and security interests associated with the acquired NPL, and assume all rights, ownership, interests, and obligations of the original creditor. In addition, the AMI also has the obligations to report credit information required by Prakas No. B7-020-352 Prokor on Credit Reporting issued by the NBC on 26 June 2020.

6. REPORTING REQUIREMENTS AND RECORD-KEEPING

AMIs must submit to the NBC, on a quarterly basis and no later than the 15^th day of the first month of the following quarter:

• its financial statements prepared in accordance with Cambodian International Financial Reporting Standards (CIFRS);
• a report on the NPL portfolio and recovery; and
• any other reports required by the NBC.

In addition to the above reports, AMIs must submit its audited financial statements to the NBC no later than 30^th April of the following year.

All transaction documents, accounting and financial records, and electronic system records must be retained for 10 years following the completion of NPL Management process.

7. CONSUMER PROTECTION MEASURES, AND INTERNAL POLICIES:

AMIs must establish and implement the following to be compliance with the applicable laws and regulations and to ensure that all activities are conducted with fairness, transparency, honesty and independence:

• a Code of Conduct for debt collection;
• a customer complaint-handling mechanism;
• policies to manage and resolve conflicts of interest; and
• internal whistleblowing procedures.

8. CONSEQUENCES OF NON-COMPLIANCE

Any institution that fails to comply with the Prakas may be penalized in accordance with Article 52 of the Law on Banking and Financial Institutions. In addition to disciplinary sanctions, the NBC may impose fines as follows:

Furthermore, the NBC may suspend or revoke an AMI’s license in the case of:

• Failure to commence business operations within 6 months of licensing;
• Violations of applicable laws or regulations;
• Insolvency; or
• Voluntarily cessation of operations.

Please contact us at HBS LAW if you have any questions. Our team at HBS LAW is ready to provide relevant legal advice and assistance pertaining to the above, as well as any other matters in the energy and mining sector in Cambodia. We are committed to delivering services that are tailored to meet your specific legal needs. 

Disclaimer: The information provided herein is for information purposes only and may not be relied upon as constituting legal advice.