Background

A recent and ongoing crisis regarding the financing of the cotton sector has highlighted the urgent need for improved governance in the financial sector, as well as enhanced competition to improve access to market-based financial services. The IMF is now preparing a special Staff Monitoring Program (SMP), which will include financial sector policy actions. Additionally, discussions have been initiated to include financial sector policy actions in a World Bank Programmatic Development Policy Grant (PDPG). This assistance from FIRST is designed to support the SMP and PDPG.

Project

The GOAL of this project is to amend existing and/or prepare new financial sector laws and regulations coveringNBT governance, bank governance,banking secrecy, licensing, consolidated supervision, remedial action, loan classification, payment system, secured lending, and deposit insurance.

The PURPOSE is to (i) review in detail the legal framework for secured lending, including the conflicting provisions in several laws and supporting regulations, and where appropriate, amend laws and/or prepare an analysis and time-bound action plan to harmonize these laws into a modern legal framework; (ii) train regulatory staff, lawyers, judges, market participants, and/or other key stakeholders on the updated legal and regulatory framework and (iii) prepare a medium-term financial sector development strategy and time-bound action plan to implement other FSAP recommendations.

OUTPUT.  The main outputs of the project are: (i) amended laws and regulations; (ii) regulatory staff, lawyers, judges, market participants, and/or other key stakeholders trained to apply revised legal and regulatory framework; (iii) financial sector strategy and time-bound action plan formally adopted by NBT or government; (iv) donors identified to support implementation of the strategy and action plan.

Project LIFE TIME is 10 months from July 2008 till April 2009.

Project BUDGET is $598,950.

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