Cambodia, Laos ink deal for cross-border payment, transfers
The National Bank of Cambodia (NBC) and the Bank of the Laos P.D.R on Monday signed a Memorandum of Understanding (MoU) to develop bilateral financial innovation and payment systems in banking integration between the two countries in response to currently rising cross-border payments and transfers, said a release by NBC on Tuesday.
Governor of NBC Chea Chanto and the Governor of the Bank of the Laos P.D.R Bounleua Sinaxayvoravong signed an MoU in Sofitel Phnom Penh Phokeethra to boost central banking cooperation. The Cambodian counterpart hosted the annual bilateral meeting which was attended by senior officials of two central banks.
“This connectivity is essential for especially businesspeople, investors, tourists and workers to be provided with formal financial services that are easy, quick, low-cost and safe to facilitate and boost the economic, tourism and trade activities between the two nations,” the release said.
In Channy, President & Group Managing Director of Acleda Bank Plc, told Khmer Times yesterday that the first publicly listed commercial bank was commissioned by NBC and the Bank of the Laos P.D.R to develop the cross-border payment and transfer system between the two countries, which is expected to be completed within six months from the date of signing the MoU.
The two central banks have selected Acleda Bank Plc as the sponsoring bank—settlement bank—as the bank has already developed a such system for the cross-payment between Cambodia and Thailand by connecting Bakong to PromptPay system of the latter, said Channy after his officials and officials of Laotian central bank have discussed this plan two times.
“Even though the trade volume or payment volume between the two countries is not big yet, there must be a system to support those activities… through providing cross-border payments and transfers with the banks in Laos, while Acleda Bank Lao Ltd (ABL) is the settlement bank at a formal exchange rate,” Channy added.
NBC had notified Acleda Bank Plc in Phnom Penh—representing the whole banking system in Cambodia through the Bakong system—about the selection of the bank in September, this year before the Bank of the Laos P.D.R informed its subsidiaries Acleda Bank Lao Ltd (ABL)—representing the whole banking system of Laos through the neighbouring country’s national system so-called Lap Net in late October this year.
Channy explained that the bilateral systems will be developed by connecting Cambodia’s Bakong currently has about 40 banking and financial institutions as members in the country to Laos’s Lap Net which consists of about 30 banks and financial institutions as members in Laos.
Commissioned by NBC – Cambodia’s monetary authority and central bank – Acleda Bank Plc will also develop a QR Code for cross-border payment between the Kingdom and Vietnam, while the bank’s QR Code has been already in use in Thailand since it was launched in February 2020.
Channy said the cross-border payments and transfers will be developed through the Association of Southeast Asian Nations (ASEAN) members. Acleda Bank Plc was listed on the country’s bourse Cambodia Securities Exchange in May 2020 and has dominated CSX with 77.03 percent of the total trading volume and 78.63 percent of the total trading value in the third quarter of this year, according to the latest report of Securities and Exchanger Regulator of Cambodia (SERC).
According to Channy, currently, Acleda Bank Plc has not only been developing its own banking and financial technology to serve its customers but also working with NBC and other government agencies to develop digital payment systems in the interest of the public as it has technical and expertise inputs.
“We have our in-house engineering teams who have been working with the central bank’s team. This is one of the reasons why we can launch the national QR code and we will continue working together to complete the first task. For the second task, we will develop the cross-border payment in each of the ten countries of the Asean,” he said, referring to the national QR Code to KHQR launched by NBC.