The Importance Of Banking Supervision

c. Why Banking Supervision is needed? While banking and financial institutions have play an important role in contributing the economic growth by collecting and allocating the resources to those who in need of finance, it also can bring the financial chaos to the economy as well. Since this industry is a sentitive and fragile one, the banking superivision is required to monitor on the banking system aiming to identify and measure risks in order to protect not only the financial institutions but also the customers from the contagious risk that would happen without any alert. Moreover, banking supervision is established in order to protect depositors against avoidable losses, thereby contributing to confidence in the financial system and the

At the same time, the amount of non-performing loan ratio has also increased from 1.9% in 2015 to 2.4% in 2016 that requires banking institutions to pay more attention and to raise caution on risky sectors in order to strengthen the effectiveness of assets quality management (Supervision Annual Report, 2016). This can be resulted from the lack of sufficient legal framework for the institution governance and its operation monitoring. Therefore, this has brought the central bank to pay more attention to the performance of the banking and financial institutions in order to avoid the bankruptcy. To deal with the doubt concerned, there are few questions the study is going to figure out what are the problems of the banking supervision at the National Bank of Cambodia and how the central bank do to manage this issues.
Section 3- Thesis Objectives The foremost objectives of this professional thesis are to:
• Asscertin the essence the the banking supervision
• Determine the issues of banking supervision
• Suggest possible solutions to cope with the issues as well as recommendations for further improvement
• Compile as the study for the students who are interested in the topic
Section 4- Methodology
a. Research Design
The study is primarily designed to find out the continuous issue of the banking system in

Method of Data Collection
The study gathers the reliable information and data through the primary sources and secondary sources.
The primary sources are collected from the annual reports of the supervision department of the NBC, the self-research, the books related to banking and financial topic and the FSDS 2016-2025. While the secondary sources involve with the interview from the employees at the supervision department and speech of the Deputy Directorate General of the supervision department on the semi-annual convention on 22 July, 2016.
Section 5- Scope and Limitation As there are many types of banking and financial institutions in Cambodia, the scope and limitation of the study is mainly take only the commercial banks and microfinances to examine. The study will only go through the basic background of the banking industry and the basic issues and solutions which excludes the other related cases involved in politics. The study is organized as follows: Chapter I : Introduction – provides an overview of banking industry Chapter II : Development – covers the overview of the supervisory authority and the issues and solutions to the core