The World Bank Report No: ISR6862 Implementation Status & Results Bangladesh Bangladesh Central Bank Strengthening Project (P062916) Public Disclosure Copy Operation Name: Bangladesh Central Bank Strengthening Project (P062916) Project Stage: Implementation Seq.No: 18 Status: ARCHIVED Archive Date: 04-Jan-2012 Country: Bangladesh Approval FY: 2003 Product Line: IBRD/IDA Region: SOUTH ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Bangladesh Bank Key Dates Board Approval Date 19-Jun-2003 Original Closing Date 31-Dec-2007 Planned Mid Term Review Date 15-Jul-2007 Last Archived ISR Date 04-Jan-2012 Effectiveness Date 28-Sep-2003 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date 04-Oct-2007 Project Development Objectives Project Development Objective (from Project Appraisal Document) To achieve a strong and effective regulatory and supervisory system for Bangladesh's banking sector. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost I. STRENGTHENING THE LEGAL FRAMEWORK 0.98 FUNCTIONAL REORGANIZATION 3.85 AUTOMATION 41.90 HUMAN RESOURCES DEVELOPMENT 3.57 STRENGTHENING RESEARCH DEPARTMENT 0.60 STRENGTHENING PRUDENTIAL REGULATIONS & SUPERVISION 0.45 Public Disclosure Copy STRENGTHENING ACCOUNTING AND AUDITING 0.31 Project Implementation Unit (PIU) Support Cost 0.69 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Page 1 of 8 The World Bank Report No: ISR6862 Implementation Status Overview The automation of Bangladesh bank is functional with the commissioning of the Enterprise Resource Planning (ERP), Core Banking, and Enterprise Data Warehouse systems. Moreover, all Bangladesh Bank branches are now connected to each other and also to the newly installed systems. The Credit Information Bureau and the Clearing House have also been automated. The use of the Electronic Fund Transfer Network supported by the core banking solution, has made it possible for government salaries to be paid directly in to the Public Disclosure Copy bank accounts of the beneficiaries. It is expected that gradually all government payments will be made through the electronic funds transfer system. Due to delays in initiating the National Payments Switch and the Office Layout and Modernization packages, these two activities may not be completed by the extended Project Closing Date of December 31, 2012. However, the likelihood of achieving the PDO is good. Locations Country First Administrative Division Location Planned Actual Bangladesh Dhaka Division Dhaka Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Acceptance and implementation of Data Yes/No Value No Yes Yes Warehouse by BB Date 27-Dec-2009 29-Mar-2012 31-Dec-2012 Comments BB does not have any Data Warehouse is Data Warehouse fully datawarehouse. operational and all 208 functional at BB. reports are delivered and tested. Training for staff of commercial banks and NBFIs completed and 50 % of the banks are expected to start web-based online reporting from July 2012. EDW Dashboard has been prepared for keyreports. Acceptance and implementation of Banking Yes/No Value No Yes Yes Public Disclosure Copy Application by BB Date 27-Dec-2009 29-Mar-2012 31-Dec-2012 Comments BB does not have Banking The Banking application has Banking application fully Application system. three modules: Core banking; functional at BB Treasury; and Market Infrastructure. The Treasury and Market Infrastructure modules are now fully functional. Core Banking module is running simultaneously with manual Page 2 of 8 The World Bank Report No: ISR6862 process. Electronic fund transfer operation for government salary payments started for selected ministries Public Disclosure Copy including Prime Minister's Office. Integration testing between Core Banking and SAP to start soon. Acceptance and implementation of ERP by BB Yes/No Value No Yes Yes Date 27-Dec-2009 29-Mar-2012 31-Dec-2012 Comments BB does not have ERP ERP went Live on Sept 22, ERP fully functional at BB. system. 2010. The ERP package has the following three modules: Finance & Control, Materials Management and HumanResources Management, which are now fully functional. SAP asset register is updated and MM module is functioning from March 2012.Financial Statements will be generated from ERP and closing will be completed in SAP. Integration between HR, MM and general ledger is expected by June 30, 2012. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Systems installed in BB to capture and share Text Value Systems are manual at this BB using "goAML" software to Systems installed in BB to data on AML/CFT, by June 30, 2012 stage. collect, analyze, manage data capture and share data on and meet workflow and AML/CFT. Public Disclosure Copy statistical needs of FIU. Date 26-Apr-2010 29-Mar-2012 31-Dec-2012 Comments Installation of AML/CFT Contract with UNODC for the systems installation and would wait till BB installs all commissioning of "goAML" its IT packages and make software expected to be them functional for BB's signed by July 2012. efficient functioning. Procurement of additional hardware initiated. Page 3 of 8 The World Bank Report No: ISR6862 Timely and accurate submission of prudential Text Value The process of submission of All banks and FIs submit all Timely and accurate returns, by FIs and better management of prudential returns by FIs are prudential returns online. submission of prudential foreign exchange, by BB by June 30, 2012 manual. Foreign exchange Management of foreign returns, by FIs and better management is also done exchange returns automated management of foreign Public Disclosure Copy manually. for greater efficiency. exchange. Date 26-Apr-2010 29-Mar-2012 31-Dec-2012 Comments These processes will be Data Warehouse and ERP automated through the systems have been implementation of implemented. 50% of banks Datawarehose and ERP submitting reports online. systems. Treasury Module under Core Banking Solution used to manage foreign exchange reserves. Timely and accurate accounting and reporting Text Value The process of accounting ERP and Core Banking Timely and accurate of government accounts and securities, by and reporting of government solutions used for all accounting and reporting of June 30, 2012. accounts at BB are manual. transactions related to government accounts and government accounts and securities functions in a timely and accurate manner. Date 26-Apr-2010 29-Mar-2012 31-Dec-2012 Comments Banking and ERP systems With the implementation of are now under ERP and Core Banking implementation, and these packages all information systems will support BB to related to government prepare timely and accurate accounts and functions now financial statistics. readily available at the end of the day. This data is now supplied to the government on a regular basis. Timely and accurate preparation and reporting Text Value Financial statistics are Financial statistics prepared The lag in reporting of of financial statistics, by BB by June 30, 2012. published with a lag of one to partly using data from EDW financial statistics brought two years. and partly from manually down to three months. Public Disclosure Copy submitted reports. Date 04-May-2003 29-Mar-2012 31-Dec-2012 Comments About 50% of the banks need to make some changes in their systems to generate data in the required format for submission through on-line RIT. These banks have been allowed time up to June 30, 2012, for full compliance. Page 4 of 8 The World Bank Report No: ISR6862 Reporting of financial statistics will be fully automated after June 2012. Bank supervisory policy manual upgraded. Text Value Outdated supervisory policy Work on upgrading the bank Upgraded manuals adopted Public Disclosure Copy manual. supervisory policy manual is and practised. in progress. Date 04-May-2003 29-Mar-2012 31-Dec-2012 Comments BB is being helped by the IMF's Resident Adviser to upgrade the bank supervisory policy manual in line with risk- based supervision framework. Quality research reports on vital issues Text Value Research reports not up to Policy Analysis Unit has one Policy Analysis Unit staffed to prepared and disseminated by BB. the mark. Resident Economic Advisor, carry out quality research. three Senior Research Economists and 12 Research Economists, and the quality of research reports has improved. Date 04-May-2003 29-Mar-2012 31-Dec-2012 Comments PAU is fully functional. The PAU has published 26 policy notes, 31 working papers on various monetary, fiscal and development issues, 8 Monetary Policy Reviews (MPR), and 7 Financial Sector Review (FSR). Eight eminent economists from the country have been contracted to conduct research along with BB staff. A modern performance management system in Text Value Outdated performance The new Performance Modern performance Public Disclosure Copy place. management system (PMS) Management System, management system adopted in place. introduced from 2007, has and practised. been reviewed and revised, and put in place from April 2012. Date 04-May-2003 20-Dec-2011 31-Dec-2012 Comments A new Performance Management system has been adopted along with a Competency Framework. The Page 5 of 8 The World Bank Report No: ISR6862 annual performance appraisal is now being conducted through PMS. A competency model has also been Public Disclosure Copy intriduced. Modern HR policies adopted. Text Value Outdated and archaic HR HR policies relating to HR policies modernized policies in BB. recruitment, rotation, compensation, performance management, and reward and recognition have either been revised or are under review. Date 04-May-2003 29-Mar-2012 31-Dec-2012 Comments BB is using the newly developed application forms for recruitment of AD. A new promotion policy and a Recognition and Reward policyhave been adopted by BB, along with a modern PMS. A Recreation Leave Policy has been implemented as a "quick win." BB work processes fully automated. Text Value Manual work processes in BB. Network connectivity Implementation of BB established among all automation component well branches. ERP, EDW and advanced Core Banking applications are functional. CIB and ACH have beenautomated. National Payment Switch is under implementation. Date 04-May-2003 29-Mar-2012 31-Dec-2012 Comments All the IT contracts have been awarded and implementation Public Disclosure Copy is almost complete, except for the National Payment Switch which will notbe completed within the Project Closing Date. BB is now using e- tendering for its own procurement. Electronic Fund Transfer Network is fully operational. Page 6 of 8 The World Bank Report No: ISR6862 Key staff in computer department receive Text Value Inadequte training programs Key staff in computer Continuous training ensured adequate training. and facilities. department have been trained through a regular computer under the various IT training program. packages. Moreover, Public Disclosure Copy overseas training has also been imparted to a large number of IT staff and end- users. Date 04-May-2003 29-Mar-2012 29-Dec-2012 Comments Key staff continue to receive training in IT areas. The package specific training programs are also ongoing. Twinning Agreement with the Bank of Thailand has been signed for further training of BB staff. Overseas training imparted on ERP, EDW, and networking. Data on Financial Performance (as of 14-May-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P062916 IDA-37920 Effective 19-Jun-2003 30-Jun-2003 28-Sep-2003 31-Dec-2007 31-Dec-2012 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P062916 IDA-37920 Effective XDR 27.20 27.20 0.00 15.84 11.36 58.00 Disbursement Graph Public Disclosure Copy Page 7 of 8 The World Bank Report No: ISR6862 Public Disclosure Copy Key Decisions Regarding Implementation The IDA project is scheduled to end on December 31, 2012. It is now vital that Bangladesh Bank maintain the momentum of implementation and fully complete as much of the the ongoing activities as possible, so that the country's Central Bank is well on its way to be an effective monetary authority and bank regulator. Restructuring History Board Approved on 27-Jul-2009, Level two Approved on 20-Mar-2011 Related Projects There are no related projects. Public Disclosure Copy Page 8 of 8