Bhutan: Supporting Financial Sector Reforms
This knowledge and support technical assistance (TA) will support financial sector reforms in Bhutan by focusing on assisting the Royal Monetary Authority (RMA) to: (i) improve their internal capacity to manage credit risks and comply with international standards, (ii) implement risk management measures encompassing the formal credit ecosystem in Bhutan and (iii) implement insurance sector strategy and recommendations to improve sector solvency, product scope and risk diversification.
Project Details
-
Project Officer
Gunawardhena, Manohari
South Asia Department
Request for information -
Country/Economy
Bhutan -
Sector
- Finance
Related Projects
| Project Name | Supporting Financial Sector Reforms | ||||||||||||
| Project Number | 51252-006 | ||||||||||||
| Country / Economy | Bhutan |
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| Project Status | Active | ||||||||||||
| Project Type / Modality of Assistance | Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Environmentally sustainable growth Inclusive economic growth |
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| Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Private sector development |
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| Sector / Subsector | Finance / Finance sector development |
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| Gender Equity and Mainstreaming | Effective gender mainstreaming | ||||||||||||
| Description | This knowledge and support technical assistance (TA) will support financial sector reforms in Bhutan by focusing on assisting the Royal Monetary Authority (RMA) to: (i) improve their internal capacity to manage credit risks and comply with international standards, (ii) implement risk management measures encompassing the formal credit ecosystem in Bhutan and (iii) implement insurance sector strategy and recommendations to improve sector solvency, product scope and risk diversification. | ||||||||||||
| Project Rationale and Linkage to Country/Regional Strategy | The proposed TA will assist in the objectives of RMA to build capacity, develop a risk-based system and enhance the supervisory process in the areas of credit, insurance and overall risk management of the financial system. | ||||||||||||
| Impact | TA is Aligned with stability and integrity of the financial system maintained (Twelfth Five Year Plan, 20182023). Financial sector reforms of Bhutan supported with strengthened capacity and implementation of financial market development strategies. |
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| Project Outcome | |
|---|---|
| Description of Outcome | Financial sector reforms of Bhutan supported with strengthened capacity and implementation of financial market development strategies by RMA strengthened. |
| Progress Toward Outcome | Progress ongoing. TA outputs are expected to be achieved by the end of 2023. Remaining capacity building programs are set to be conducted in the first quarter of 2023, while outputs for the (i) insurance sector, (ii) risk-based supervision and climate finance, and (iii) credit risk and collateral valuation are set to be completed by first half of 2023. |
| Implementation Progress | |
| Description of Project Outputs | Insurance sector strategy strengthened Implementation of short to medium term strategies on credit risk management and efficient recovery of assets in the financial system enhanced Risk Based Supervision System (RBSS) for banks and nonbanks implemented Coverage and delivery of insurance products and annual reporting on financial inclusion enhanced |
| Status of Implementation Progress (Outputs, Activities, and Issues) | Progress ongoing. All proposed consultants in the TA were recruited and mobilized by August 2022. The Financial Consumer Compensation Policy was drafted by the legal experts and capacity building on compensation policy was virtually conducted in July 2022 as planned. Onsite trainings in Bhutan for RMA and financial institution representatives on i) Credit Rating Model - Behavioral Scorecard and Application Scorecard Trainings and ii) Collateral Valuation Training were conducted in October 2022. Outputs and capacity building workshops for the assignments in (i) insurance sector, and (ii) risk-based supervision and climate finance are continuing. |
| Geographical Location | Nation-wide |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | The relevant stakeholders have been engaged during the preparation and design of the TA. |
| During Project Implementation | Consultations and meetings are regularly held with relevant stakeholders and consultants to ensure outputs are reviewed and discussed and views of all stakeholders are considered. |
| Business Opportunities | |
|---|---|
| Consulting Services | ADB will recruit consulting firms with international and national consultants. The firms will be engaged by ADB through quality- and cost-based selection with a quality-cost ratio of 90:10, because of the highly specialized expertise needed, using a simplified technical proposal in accordance with the ADB Procurement Policy (2017, as amended from time to time). |
| Procurement | not applicable |
| Responsible ADB Officer | Gunawardhena, Manohari |
| Responsible ADB Department | South Asia Department |
| Responsible ADB Division | Public Management, Financial Sector and Trade Division, SARD |
| Executing Agencies |
Ministry of Finance |
| Timetable | |
|---|---|
| Concept Clearance | 18 Nov 2021 |
| Fact Finding | 17 Nov 2021 to 17 Nov 2021 |
| MRM | - |
| Approval | 16 Dec 2021 |
| Last Review Mission | - |
| Last PDS Update | 13 Dec 2022 |
TA 6885-BHU
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 16 Dec 2021 | 23 Dec 2021 | 23 Dec 2021 | 31 Oct 2023 | - | - |
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 610,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 610,000.00 | 13 Dec 2022 | 156,888.07 |
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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| Title | Document Type | Document Date |
|---|---|---|
| Supporting Financial Sector Reforms: Technical Assistance Report | Technical Assistance Reports | Dec 2021 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
Tenders
| Tender Title | Type | Status | Posting Date | Deadline |
|---|---|---|---|---|
| Climate Finance Specialist - I4 | Individual - Consulting | Closed | 24 Mar 2022 | 30 Mar 2022 |
| Risk-Based Supervision Lead Expert - I3 | Individual - Consulting | Closed | 24 Mar 2022 | 30 Mar 2022 |
| Credit Risk Management Lead and Collateral Valuation Expert - F2 | Firm - Consulting | Closed | 05 Feb 2022 | 19 Feb 2022 |
| National Legal Expert in Consumer Protection - I2 | Individual - Consulting | Closed | 05 Feb 2022 | 18 Feb 2022 |
| Insurance Sector Lead and Actuarial Expert - F1 | Firm - Consulting | Closed | 01 Feb 2022 | 15 Feb 2022 |
| Risk-based Supervision Lead and Climate Finance Specialist - F3 | Firm - Consulting | Closed | 01 Feb 2022 | 15 Feb 2022 |
| International - Legal Expert in Consumer Protection | Individual - Consulting | Closed | 01 Feb 2022 | 07 Feb 2022 |
Contracts Awarded
| Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
|---|---|---|---|---|---|---|
| Research and Development Technical Assistance | Technical Assistance 6885 | 19 Jul 2022 | ERNST & YOUNG LLP (INDIA) | 6th Floor, Wing A & B, Worldmark 1, Aerocity, Indira Gandhi Intl. Airport, New Delhi 110 037 India | Ministry of Finance | 234,870.00 | — |
| Research and Development Technical Assistance | Technical Assistance 6885 | 24 May 2022 | Ernst & Young (SRI LANKA) | 201, De Saram Place, Colombo 10 Colombo, Western Province Sri Lanka | Ministry of Finance | 120,000.00 | — |
Procurement Plan
None currently available.