In practical terms, therefore, the Cambodian banking system as we know it today began in the spring of 1994, when the government issued a number of new commercial banking licenses. The number of banks quickly rose to 31, including two government-owned bank, 22 locally incorporated banks and seven branches of foreign banks.

Following the enactment of the Law on Banking and Financial Institutions in 1999 and a comprehensive bank restructuring program undertaken in 2000 with the assistance of the International Monetary Fund, the number of banking institutions began to drop and today the system has stabilised at 51, consisting of 27 fully licensed commercial banks, 6 specialized banks, 18 microfinance institutions and 2 foreign bank representative offices. Under the law, all of these must be members of The Association of Banks in Cambodia.

During recent years Cambodian banks have moved into credit card operations, ATM, mortgage and SME lending. Full development of commercial operations, however, had been hindered by the lack of a complete legal framework. This problem is being addressed by the government, and laws are various stages of drafting or pending enactment.

In addition, law on anti-money laundering and combating the financing of terrorism has been passed by the National Assembly. This law amplifies the regulations already in effect that are in accordance with international practice.