Mongolia: Strengthening Banking Sector Stability and Performance
The TA will support implementation of the Medium-Term Banking Sector Strengthening Program for 2020-2023 approved by the Bank of Mongolia (BOM) in September 2020. The TA will focus on (i) upgrading bank ownership and accountability frameworks, (ii) improving reporting and regulation of banks' assets, and (iii) promoting new financial products and business models.
Rosenkranz, Peter C.
East Asia Department
Request for information
|Project Name||Strengthening Banking Sector Stability and Performance|
|Country / Economy||Mongolia
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Finance / Finance sector development
|Gender Equity and Mainstreaming||No gender elements|
|Description||The TA will support implementation of the Medium-Term Banking Sector Strengthening Program for 2020-2023 approved by the Bank of Mongolia (BOM) in September 2020. The TA will focus on (i) upgrading bank ownership and accountability frameworks, (ii) improving reporting and regulation of banks' assets, and (iii) promoting new financial products and business models.|
|Project Rationale and Linkage to Country/Regional Strategy||Stability of the banking industry, which constitutes more than 90% of the country's financial sector, continues to be affected by the high-level of nonperforming loans (NPLs), inadequate capital, and weak governance. The TA will help address the issues with bank ownership concentration and accountability, risk management, and paucity of technology-based new financial instruments and business models. It is an integral part of ADB's comprehensive, sustained, and effective support to the financial sector development in Mongolia. The TA will enable continued support to the implementation of the 2017-2020 medium term reform framework of the ADB-supported Banking Sector Rehabilitation and Financial Stability Strengthening Program. The TA follows on the recommendation of program's completion report that ADB should expand and deepen support to the finance sector and that future financial sector operations should the focus on banking reforms.|
Investor confidence increased and financial intermediation of Mongolia's banking sector expanded
|Description of Outcome||
Regulation and management for promoting governance, stability, and development of the banking sector improved
|Progress Toward Outcome||In end-February 2021, amendments to the Law on Banking became effective. The amendments are on reducing the ownership concentration of banks, better regulating the control of banks by influential shareholders, and transforming banks into open joint stock companies with eventual public listing of systemically important banks. This amendments were critical for effective implementation of the TA.|
|Description of Project Outputs||
Policy advice on regulatory frameworks on bank ownership and accountability_finalized
Guidelines on reporting and regulation of banks' assets updated
Digital financial products and business models promoted
|Status of Implementation Progress (Outputs, Activities, and Issues)||The engagement of the consulting firm to deliver the TA's outputs is ongoing, and the_consulting firm was onboard in June 2021. Based on the request of the EA, implementation of Output 3 has been transferred to the Financial Regulatory Commision.|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||During the preparation of the TA, consultations were held with the Bank of Mongolia, pertinent government agencies, banking industry associations, selected banks, and development partners.|
|During Project Implementation||The Project Team maintains the close consultation with the Bank of Mongolia, Financial Regulatory Commision, and pertinent government agencies.|
|Consulting Services||ADB will recruit a consulting firm (association of firms) to deliver the activities under the TA. The firm, which will be engaged through quality-and cost-based selection under a partial lump-sum contract using performance (output)-based terms of reference, will comprise international (15 person-months) and national experts (24 person-months) on (i) banking (ownership, control, mergers and acquisitions, asset-liability management); (ii) legal aspects of banking (corporate governance, legal form, public listing, fintech); (iii) financial management (bank accounting); (iv) finance sector development (banks, non-banks, capital market); and (v) fintech. The TA will also engage experts renowned in e-commerce, digital finance, and new business models to facilitate knowledge transfers from the regional countries' successful experiences. ADB will engage the consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated procurement instructions.|
|Procurement||Procurement of goods is not envisaged under the TA.|
|Responsible ADB Officer||Rosenkranz, Peter C.|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||Public Mgt, Financial Sector and Regional Coop Division, EARD|
Bank of Mongolia (Central Bank)
|Concept Clearance||14 Sep 2020|
|Fact Finding||28 Sep 2020 to 06 Oct 2020|
|Approval||26 Nov 2020|
|Last Review Mission||-|
|Last PDS Update||29 Sep 2022|
|Approval||Signing Date||Effectivity Date||Closing|
|26 Nov 2020||19 Dec 2020||19 Dec 2020||30 Jun 2023||-||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|750,000.00||0.00||0.00||0.00||0.00||0.00||750,000.00||29 Sep 2022||25,189.75|
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.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Strengthening Banking Sector Stability and Performance: Technical Assistance Report||Technical Assistance Reports||Nov 2020|
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.
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.
|Tender Title||Type||Status||Posting Date||Deadline|
|Banking Reform Advisory and Capacity Building Consulting Firm||Firm - Consulting||Closed||08 Dec 2020||08 Jan 2021|
|Contract Title||Approval Number||Contract Date||Contractor | Address||Executing Agency||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|Capacity Development||Technical Assistance 6613||14 Jun 2021||KPMG Audit LLC in association with KPMG Asesores, S.L. | #602, Blue Sky Tower, Peace Avenue 17, 1 Khoroo, Sukhbaatar District Ulaanbaatar, Mongolia||Bank of Mongolia (Central Bank)||700,000.00||—|
None currently available.