Cambodian depositors rush to withdraw funds after banks suspend services and impose withdrawal limits

Dozens of Cambodian depositors rushed to the Asia Development Bank - Pacific (APD) headquarters in central Phnom Penh on 16 March after the bank unexpectedly announced a suspension of services and withdrawal limits. Depositors were reportedly allowed to transfer up to USD 300 per day, raising concerns about liquidity and triggering panic.

APD withdrawal limits spark depositors’ rush

Local media reported that many customers with balances ranging from thousands to millions of USD gathered outside the bank but could not enter. The bank had earlier announced a five-day outage for “maintenance.” After reopening, restrictions continued, intensifying fears among depositors.

One depositor said the bank had warned of legal action against those spreading negative information, adding that customers could not withdraw all funds at the counter or through ATMs. Another depositor said she had about USD 1,000 in her account and withdrew all of it within four days, saying the experience eroded her trust in saving.

Other banks issue reassurance; sector confidence tested

Hours later, Phillip Bank said its financial position remained stable and denied Telegram rumors that the bank was under management. Canadia Bank and the microfinance institution LOLC also issued reassuring statements. Banking and microfinance associations defended their members, saying negative information about individual institutions does not reflect the sector overall.

Jinho Choi, Head of Economic and Economic Research at the ASEAN+3 Macroeconomic Research Office (AMRO), said there were no signs of systemic risk because banks still maintained adequate capital buffers. He added that withdrawals from APD largely reflected psychological factors, while confidence risks remained a weakness even if systemic stress had not yet emerged.

Underlying pressures and rising credit risks

Analysts said the events reflect growing concerns about the resilience of Cambodia’s banking system as the economy faces multiple pressures. Jayant Menon, Senior Fellow at the ISEAS-Yusof Ishak Institute (Singapore), cited a “double shock” of rising risk and uncertainty at home, in the region, and globally, alongside lingering effects from pandemic-era support measures that have not been fully unwound.

He pointed to several risk drivers, including high export taxes to the United States since last April and escalating border tensions with Thailand that have involved military clashes. These developments reportedly led hundreds of thousands of migrant workers to return home and reduced international tourism, a key economic sector. Additional factors mentioned included domestic fraud activity and the impact of the global energy crisis.

Capital buffers remain solid, but non-performing loans are rising

According to the National Bank of Cambodia’s (NBC) 2025 Macroprudential Surveillance Report, Cambodia hosts 59 banks, most of which are foreign-dominated or branches of international banks. The CET ratio of commercial banks stood around 22% at year-end, above the minimum 15%, indicating a relatively solid capital buffer.

However, AMRO’s 2024 analysis warned that some banks remain vulnerable even as the sector’s overall capital base stays strong, with the biggest concern being asset quality. The industry-wide non-performing loan (NPL) ratio rose to 8.3% in 2025, from 7.1% in 2024 and 2.1% in 2020—an increase of over 300% over five years.

Major commercial banks cited included Acleda with NPLs of 6.9% and ABA with 8.1%. Smaller banks with greater exposure to microfinance recorded higher levels, including Phillip Bank at 17.2% of its portfolio, Prince Bank at 28%, and microfinance Hattha Bank (Thai-owned) at 35.6% in 2025.

Policy response and the deposit insurance gap

Jinho Choi said rising NPLs, together with credit concentration in real estate amid a stagnant market, are forcing the banking system to adjust. He argued that stabilizing the system requires effective NPL resolution mechanisms and a reorientation of credit toward higher-productivity sectors. He also emphasized the need for clear communication and coordinated action, including liquidity support when needed and orderly resolution of troubled institutions.

A notable issue raised in the reporting is that Cambodia currently lacks a national deposit insurance system, leaving savers without protection in risk scenarios—an arrangement described as uncommon in the ASEAN region. For years, international institutions and the NBC have discussed implementing such a scheme to build confidence and encourage savings in the domestic currency.

NBC steps in after APD outflow; liquidation cases add pressure

In response to the APD deposit outflow, NBC moved quickly. Governor Chea Serey posted a Facebook video explaining mass withdrawals and said no bank can meet withdrawals if all depositors withdraw at once, urging calm without naming banks. As panic spread online, she posted a second video reassuring Prince Bank and Panda Bank clients, two institutions undergoing liquidation amid allegations of fraud.

Prince Bank is owned by Tran Chi, founder of Prince Group, who has been expelled to China to face criminal charges related to large-scale fraud. The U.S. Department of Justice has also indicted him, including allegations of seizing roughly USD 15 billion in cryptocurrency assets.

NBC said it has begun refunding deposits at Prince Bank from the end of last month and at Panda Bank on 02/04, though on a limited scale. A Panda Bank customer with about USD 10,000 in savings said he had trusted that deposits were safe within the system, but after the events said he should have investigated the bank more thoroughly. Another Panda Bank client said he was waiting to withdraw a USD 20,000 term deposit and described anxiety after liquidation staff reportedly called only a small number of customers.

Regulator actions to manage liquidity and clean balance sheets

NBC said the APD situation mainly stemmed from the sudden withdrawal wave and does not reflect systemic stability. The agency said it increased oversight after liquidity pressure at the bank and stated that its analysis shows meaningful impact occurs primarily at banks under liquidity stress due to rumors, such as APD.

To shore up the system, NBC in February issued rules enabling asset management companies to buy non-performing loans and collateralized assets to help clean banks’ balance sheets. Last month, it also issued guidance to act as a lender of last resort, providing liquidity in USD and rial to eligible institutions.

Menon said the effectiveness of liquidity support may be limited by Cambodia’s high degree of dollarization, noting that while more riel can be printed, the key question is whether that is the currency banks actually need. He said current concerns are tied to a few isolated cases rather than systemic risk, but stressed that NBC should build a credible NPL resolution framework to prevent repeats of mass withdrawals.

Outlook: stability holds, but risks could spill over

While the financial system was described as stable, Menon warned that broader economic difficulties are unlikely to ease soon and could spill over into the financial sector. He said the real economy behind the banking system matters more than focusing only on financial indicators.