Regional: Supporting Financial Stability in Bhutan and the Maldives

Sovereign Project | 46114-001 Status: Closed


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Project Name Supporting Financial Stability in Bhutan and the Maldives
Project Number 46114-001
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8284-REG: Supporting Financial Stability in Bhutan and the Maldives
Financial Sector Development Partnership Fund US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Finance - Banking systems and nonbank financial institutions

Gender Equity and Mainstreaming
Project Rationale and Linkage to Country/Regional Strategy

Project Outcome

Description of Outcome
Progress Toward Outcome

Macroprudential rules and regulations have been institutionalized by the RMA and notified in its website for adoption. The MMA has yet to deliberate on the timing for the implementation of these regulations.

RMA and MMA are considering to formally institutionalize the Financial Stability Unit within their organizational structures. Nevertheless, both the RMA and MMA have assigned dedicated staff to perform tasks related to financial stability.

Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)

" Drafted 8 macroprudential rules and regulations i.e. (i) counter-cyclical capital buffer for banks (ii) sectoral capital requirements (iii) loan to value and loan to income restrictions (iv) time varying capital provisioning for banks (v) restriction on distribution of profits (vi) minimum ceiling on leverage ratio for banks in Bhutan (vii) disclosure requirements and (viii) debt to equity ratio. The RMA has institutionalized and published 7 of the regulations in its website for adoption. The MMA has yet to deliberate on the timing for adoption and implementation of these regulations.

" Prepared a stress testing template for Bhutan and Maldives, adapting it closely to the structure of each country's financial system. This includes a guidance document with details on how to conduct the stress-testing operations.

" Developed a list of financial soundness and macroeconomic indicators and template for macroprudential monitoring and surveillance.

" Constructed an aggregate financial stability index (AFSI) using sub-indices measuring health of financial sector, risks emanating from other economies and other macro-economic risks to the financial sector.

" Prepared financial stability report for Bhutan and Maldives

" Developed a framework for monitoring and forecasting the macro influences on banking system liquidity. Spreadsheets and processes that need to be followed have been prepared and documented.

" Developed a framework for monitoring the prudential liquidity positions and management of each individual bank. This is based on the new international standards promulgated by the Basel Committee on Banking Supervision (the liquidity coverage ratio, and a net stable funding


" In-country training workshops on macro-prudential regulations, stress testing, financial soundness indicators early warning signals and liquidity management were conducted in Bhutan and the Maldives.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations with the Maldives Monetary Authority (MMA) and the Royal Monetary Authority of Bhutan (RMA) and other stakeholders were conducted during project design.
During Project Implementation Various in-country trainings and stakeholder consultations on macro-prudential regulations, liquidity management, stress testing, financial soundness indicators and early warning signals were conducted in Bhutan and the Maldives during the course of project implementation. A Final Stakeholder Dissemination and Training Workshop was held on 23-24 March 2015 to: (i) present the overall outputs of the RETA and the draft financial stability reports (FSRs) prepared for Bhutan and the Maldives by the project consultants from PWC (India), and (ii) conduct a one-day training seminar on financial stability and macroprudential surveillance.

Responsible Staff

Responsible ADB Officer Jennifer Romero-Torres
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines


Concept Clearance 12 Apr 2012
Fact Finding 13 Jun 2012 to 14 Jun 2012
Approval -
Last Review Mission -
Last PDS Update 15 Sep 2015

TA 8284-REG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Dec 2012 - 10 Dec 2012 28 Feb 2015 30 Nov 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 500,000.00 0.00 0.00 0.00 0.00 500,000.00 10 Dec 2012 437,551.70

Safeguard Documents See also: Safeguards

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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