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PROJECT INFORMATION DOCUMENT (PID) 
CONCEPT STAGE 
Report No.:  AB691 
Project Name 
VN-Payment System and Bank Modernization 
Region 
EAST ASIA AND PACIFIC 
Sector 
Payment systems, securities clearance and settlement (75%);Banking (25%) 
Project ID 
P082627 
Borrower(s) 
SOC. REP. OF VIETNAM 
Implementing Agency 
The State Bank of Vietnam 
Environment Category 
[ ] A   [ ] B   [X] C   [ ] FI   [ ] TBD (to be determined) 
Safeguard Classification 
[ ] S
1
   [ ] S
2
  [ ] S
3
   [ ] S
F
   [ ] TBD (to be determined)
 
Date PID Prepared 
February 12, 2004 
Estimated Date of Appraisal 
Authorization 
March 8, 2004 
Estimated Date of Board 
Approval 
May 20, 2004 
 
 
1. 
Key development issues and rationale for Bank involvement 
 
The proposed project  will build upon the first Payment System and Bank Modernization Project that helped 
establish the IBPS for the country and assisted a number of commercial banks with the development of their intra-
bank payment systems and with the establishment of  modern banking systems. The first project was seen as a pilot 
that only allowed a limited number of IBPS processing centers and financed  the roll out of the new commercial 
banks systems to a limited number of branches per commercial bank. The Government's goal is to give all banks and 
branches access to the IBPS system by the end of 2005 and roll out the new systems at the commercial banks 
beyond the limited branches that will be connected by end December 2003. The CAS emphasizes that the 
establishment of a sound market-based financial intermediation system in Vietnam is perhaps the most difficult 
technical challenge facing Vietnam's policymakers. This project will, together with other Bank-financed activities in 
the Banking sector, help Vietnam meet this challenge. This project is, therefore the first of two financial sector 
operations included in the CAS review (Schedule to be presented to the Board by March 2004) aimed at providing 
assistance for the modernization of the SBV and all commercial banks in the Country between FY04 and FY06. 
 
2. Proposed 
objective(s) 
 
The proposed Payment System and Bank Modernization 1.2 Project would expand the scope of the first Payment 
System and Bank Modernization Project by: (i) increasing the number of IBPS processing centers throughout the 
country so that it can continue operating in a fast, reliable and safe manner; and (ii) accelerate the roll out of the new 
systems to a substantial number of commercial bank branches in the next two to three years. This will minimize the 
possible operational problems and costs of running two different systems in parallel through their branch networks. 
 
3. Preliminary 
description 
 
Given the objectives mentioned above and the type of work envisioned, the expansion will be an “Investment 
Operation” and it is being prepared under the new World Bank procedures for processing “repeater projects.  
Repeater projects are those whose basic design and effectives has been proven, and which a borrower proposes to 
augment and scale up.  The purpose of such operation could be to raise the quantity of the output, extend the 
geographical scope of the output to cover additional areas or individuals in a country, or add components over an 
extended time horizon.”   
 
The project will have two major components: (i) the expansion of the Inter-bank Payment System at the State Bank 
of Vietnam;  and  (ii) the roll out of the new systems at the following  five Commercial Banks (CB):  Vietnam Bank 
for Agriculture and Rural Development (VBARD); Bank for Investment and Development of Vietnam (BIDV), 
Industrial and Commercial Bank of Vietnam (ICB); Vietnam Maritime Commercial Stock Bank (Maritime) and 
Vietnam Export – Import Bank (Eximbank). 
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4. 
Safeguard policies that might apply 
[Guideline:  Refer to section 5 of the PCN.  Which safeguard policies might apply to the project and in what ways?  
What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?]
 
 
N/A 
 
5. Tentative 
financing 
Source: 
($m.) 
BORROWER/RECIPIENT 0 
INTERNATIONAL DEVELOPMENT ASSOCIATION 
100 
 
Total 100 
 
6. Contact 
point 
Contact: Miguel Navarro-Martin 
Title: Sr. Financial Sector Spec. 
Tel: (202) 458-4722 
Fax: (202) 522-3094 
Email: Mnavarromartin@worldbank.org