Cambodia: NBC Set for FAST Step Towards Riel Economy

Apr 2016
Cambodia, April, 20 2016 - The central bank will launch its FAST system tomorrow, the first system offering real time transfers in riel across banks and Microfinance Deposit-taking Institutions (MDIs) – a move that will boost the local currency in a dollarized economy.

The FAST (Fast and Secure Transfer) system introduces modern payment methods to the Kingdom, the National Bank of Cambodia (NBC) said in a statement yesterday.

“The introduction of this system will contribute to promoting the use of the riel and electronic payments, making payments within both the private and public sectors safer, faster, more efficient and transparent,” it said. “The National Bank of Cambodia will implement the soft launch of FAST System on April 22.”

NBC director general Chea Serey Khmer Times yesterday that the project was planned in late 2014 and by mid-2015, the bank had engaged with all banks and MDIs to move ahead. By the third quarter of last year, the NBC started the integration process with member banks and MDIs, which took six months. 

She said that the FAST system allows customers to move or transfer funds across banks and MDIs. The purpose of the transfer can be anything – for remittances, bill payments, bulk payments, payrolls, online payments and also to pay tax. 

“The FAST system is a kind of real-time fund transfer system. The development of this system aims to provide a safe, efficient and cost-effective retail payment infrastructure that meets the current and future needs of financial institutions, the government, business and citizens,” she said.

Hout Ieng Tong, president of the Cambodia Microfinance Association told Khmer Times yesterday the introduction of the new system clearly aimed to boost the use of local currency in the economy. He said the system would make transfers faster and more convenient.

“It has a lot of benefits,” he said, “firstly, it will promote the use of the local currency. Secondly, it will make it easier for people who transfer money from banks to Microfinance Institutions and vice versa and from province to province.

“This will make more transfers more convenient because it will make financial transactions faster.”

Dollar transactions account for about 83 percent of all transactions, according to the most recent data from the central bank. The Thai baht and Vietnamese dong are also used in border trade and in border towns.

Mr. Hout, who is also general director of Hatthakasekar Microfinance Institution, said the use of the riel remained limited in the economy and in the financial sector. Most deposits at his MFI are in US dollars, he said. Only 25-30 percent are in riel, Riel deposits surpassed $270 million by the end of the first quarter, he added

“I do believe that the use of riel will be increasing more broadly because the new system launched by the NBC will be fast and convenient.”

Ms. Serey said FAST was based on international best practice, basically following the UK FAST system.

“Cambodia is among the first countries in Asia to go live with a real-time fund transfer system,” she said. “With the system running 24/7 and cap per transaction limit at 40 million riel ($1,000), it is aimed at small retail transactions,” she added.

Source : Khmer Times

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