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Fears over transparency in Cambodia’s banking sector have intensified after a Phnom Penh bank briefly suspended services and capped transfers, with experts warning that disruptions could trigger wider panic following recent license revocations and bank liquidations.
On Monday, customers lined up at the headquarters of Asian-Pacific Development (APD) Bank in the capital to withdraw funds after it limited daily transfers to $300, while Visa services remained unavailable following a five-day outage the bank attributed to “system maintenance.”
The bank holds more than $1 billion in deposits, according to its 2024 annual report. Its chairman, Vong Pech, owns 99% of its shares, an ownership structure industry experts reportedly said is unusual, alongside asset growth exceeding $1 billion since its founding in 2016.
The bank’s downtime quickly fueled speculation, coming amid the license revocation of financial institutions blacklisted by the United States and others over alleged ties to scam networks, including Prince Bank and Huione Pay, now known as H-Pay. The firms and their parent companies have denied involvement in scams or money laundering.
Panda Bank, which has not been accused of wrongdoing by U.S. prosecutors but whose senior leadership is linked to Huione and Prince, also had its license revoked and was forced into liquidation in February over a “deteriorating financial condition,” the National Bank said at the time.
APD said speculation that its license was being revoked was false and that it would pursue legal action against what it described as rumors alleging involvement in online fraud.
The National Bank of Cambodia (NBC) has since sought to quell uncertainty and prevent runs on banks. Governor Chea Serey on Monday urged the public to give the central bank time to work with commercial lenders to resolve deposit issues and said the country’s banking sector “remains strong.”
A local financial analyst said the APD case highlights consumer protection concerns.
“It may have been a technical issue that the bank did not inform customers about beforehand,” said Ngeth Chou, an economist and investment expert at F.I Vision Capital. “Normally, maintenance is scheduled in advance. It is not an accident.”
He added that without prior notice, such situations can cause public concern and disrupt daily life, as many people now rely on digital transfers and keep minimal cash on hand.
APD only notified customers of the outage on its Facebook page after it took effect on March 11.
Central bank guidelines on risk management stipulate that lenders must monitor systems to quickly detect outages and respond promptly to minimize disruptions.
APD did not immediately respond to a request for comment via its publicly listed email. The NBC also did not immediately respond to a request for comment.
Chou said he could not speculate on the cause of APD’s downtime and suspended services but urged greater transparency from the bank and the NBC. He added that without clear information from authorities, rumors can fuel public panic.
Beyond concerns linked to the online scam industry, which the government has said it aims to eliminate by April, the banking sector is also facing rising non-performing loans, prompting the NBC last month to establish a system for asset management institutions.
Amid public uncertainty, other financial institutions have sought to reassure customers. Philip Bank and LOLC issued statements saying they remain fully operational and financially stable.
The Association of Banks in Cambodia (ABC) and the Cambodia Microfinance Association (CMA) also asserted that the country’s banking sector “remains strong,” adding that liquidity is sufficient and under strict central bank supervision.
