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IDs are not ‘sufficient guarantee’ for loans


geovalin

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Cambodia’s central bank has asked all financial institutions, especially rural lenders, to refrain from accepting personal identity cards, residential records and family books as a guarantee while giving out loans to consumers. In a circular released on Friday, the National Bank of Cambodia (NBC) said the use of documents like a personal identity card or family book – a record of members in a particular family – could not be used as a guarantee, given that they had no “economical value” and was against banking regulations.

“ID cards, family books or residence books are authentic letters issued by authorities only for personal identification,” the circular read. “All banking and financial institutions and rural creditors must immediately stop taking such documents to ensure a loan.” The NBC added that lenders who continued to accept these documents would be penalised under the banking and financial institutions law.

read more: http://www.phnompenhpost.com/business/ids-are-not-sufficient-guarantee-loans

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