GOOD EVENING FAMILY:
I WAS TALKING WITH ONE OF MY CONTACT IN IRAQ ,THIS CONTACT WORKS FOR ONE OF THE BANK IN IRAQ.I DID ASK HIM WHY THE DELAY IN RI/RV DINAR? HE TOLD ME THAT THE WORLD BANK WITH HELP OF IMF,US TREASURY,EU ARE DOING A BANKING SECTOR REFORM PROJECT, AND THE PROJECT CLOSING DATE IS ON OCT,2010......SO I DID SOME HOMEWORK AND I FOUND OUT THE ARTICLE.
STRATEGIC CONTEXT AND DONOR COORDNATION:
THE IMF HAS TAKEN THE LEAD IN MONETARY ACTIVITIES AND REBUILDING THE CAPACITY OF CBI.
http://siteresources.worldbank.org/IRFFI/Resources/PSSITFBanking2010.pdf
For those that cannot open it -
World Bank Iraq Trust Fund
Banking Sector Reform Project (TF094193/P113337)
March 2010
Project Summary Sheet
Title Banking Sector Reform Project
Implementing
Agency
Central Bank of Iraq (CBI)
Location N/A – Institutional Support/Nationwide
Sector code
(OECD DAC)
24010 Financial Policy and Administrative Management
24020 Monetary Institutions
Compact
Priority
4.3.3.1 Undertake specific measures to restructuring State-Owned Banks
4.3.3.2 Undertake specific measures to promote private banking
Project Cost US$10 million
Duration 18 months
Approval Date April 2009 Effective Date April 2009 Closing Date October 2010
Project
Description
The project aims to support the Iraqi authorities in the implementation of Phase I of the
“Iraq Banking Reform Strategy” (2008-2012) and its Action Plan, focusing on four
main components: (i) institutional and operational restructuring of the two state-owned
commercial banks; (ii) financial restructuring of the two state-owned commercial banks;
(iii) strengthening the regulatory and supervisory functions of the Central Bank of Iraq;
and (iv) project management, monitoring and evaluation.
Beneficiaries
The project supports the Iraqi government to build a sound banking system, able to
provide efficient financial services competitively. The immediate direct beneficiaries
would be the two largest state-owned commercial banks—Rafidain Bank and Rasheed
Bank—which account for more than 70 percent of the banking system. Ultimately, all
Iraqi businesses and citizens will benefit from an improved banking system that can
provide the resources needed for Iraq’s growth and offer good deposit and payment
systems for businesses and households.
Near Term
Employment
Creation
N/A
Strategic Context and Donor Coordination
The donor community has been active in helping Iraq in restructuring the banking sector. The World Bank
has been coordinating with all development partners involved in the banking reform, including the IMF,
EU, US Treasury, and Financial Services Volunteer Corps (FSVC). The IMF has taken the lead in
monetary activities and rebuilding the capacity of CBI. The US has focused mainly on the restructuring and
financial audits of the state-owned banks, and helping Iraq draft an operational restructuring plan. FSVC
provides technical assistance to CBI to strengthen its internal operations. The World Bank chairs an “Iraq
Banking Reform Donors Group”, to coordinate efforts, promote complementarity, and avoid overlap.
Project Development Objective
• Support Iraq’s implementation of Phase I of the Iraq Banking Sector Reform Strategy
• Strengthen the supervisory framework for financial intermediation
Outputs, Key Activities and Procurement
Outputs
• New organizational structures for the two state-owned banks are adopted
• Number of staff trained in each bank would reach at least 100 staff members
• Compliance supervisory and regulatory framework (Basle Code Principles)
Activities
• Plans for development of new organizational structures are completed, approved
and adopted
• Training in bank operations provided
Procurement
Goods: US$0.35 million
Consultants’ Services and Training: US$8.40million
Incremental Operating Expenses: US$0.75 million
Unallocated: US$0.50 million
Financial Data
Funds Committed US$0.2 million % approved 2
Funds Disbursed US$0.2 million % approved 2
Forecast Closing Date October 2010
Delay
(months)
0
Progress against indicators
Improvement in functioning of the two
state-owned commercial banks, evident in
the increase in loan-to-GDP ratios from
4% in June 2006 to 6% in October 2010.
Loan-to-GDP ratios
increased to reach 5% in
2009
% of planned
Build-up in provision levels at the two
state-owned commercial banks for new
loans, reflected in the reserves-to-NPLs
ratios, rising from 10% in June 2006 to
20% in October 2010.
The reserves-to-NPL
ratios raised from 10%
in June 2006 to reach
16% in 2009
Capital adequacy ratio in line with
prudential regulations, reaching up to 4%
by October 2010.
Capital adequacy ratio
reached 4% in 2009
Number of staff trained to do bank
operation
Number of staff trained
to do bank operations
reached 4 in 2009
Qualitative Assessment of Project Performance
Good progress has been made to date towards the objectives laid out by the GOI in its Banking Reform
Strategy. Some achievements have been made in terms of the institutional, operational and financial
restructuring of the two state-owned commercial banks. These include the improvement of the business
organization and the upgrading of the information technology infrastructure to connect bank branches with
Central Bank of Iraq (CBI). On financial restructuring of the two state-owned banks, the MOF in
coordination with CBI have reduced the problem of non-performing loans (NPL), which have dropped by
20% in June 2007. In terms of project management, monitoring and evaluation, the PMU has been
established and well equipped with competent staff, and the required furniture and technology.
Major Implementation Obstacles
Due to the short lifetime of the project, there is likelihood to extend the project closing date.
I WAS TALKING WITH ONE OF MY CONTACT IN IRAQ ,THIS CONTACT WORKS FOR ONE OF THE BANK IN IRAQ.I DID ASK HIM WHY THE DELAY IN RI/RV DINAR? HE TOLD ME THAT THE WORLD BANK WITH HELP OF IMF,US TREASURY,EU ARE DOING A BANKING SECTOR REFORM PROJECT, AND THE PROJECT CLOSING DATE IS ON OCT,2010......SO I DID SOME HOMEWORK AND I FOUND OUT THE ARTICLE.
STRATEGIC CONTEXT AND DONOR COORDNATION:
THE IMF HAS TAKEN THE LEAD IN MONETARY ACTIVITIES AND REBUILDING THE CAPACITY OF CBI.
http://siteresources.worldbank.org/IRFFI/Resources/PSSITFBanking2010.pdf
For those that cannot open it -
World Bank Iraq Trust Fund
Banking Sector Reform Project (TF094193/P113337)
March 2010
Project Summary Sheet
Title Banking Sector Reform Project
Implementing
Agency
Central Bank of Iraq (CBI)
Location N/A – Institutional Support/Nationwide
Sector code
(OECD DAC)
24010 Financial Policy and Administrative Management
24020 Monetary Institutions
Compact
Priority
4.3.3.1 Undertake specific measures to restructuring State-Owned Banks
4.3.3.2 Undertake specific measures to promote private banking
Project Cost US$10 million
Duration 18 months
Approval Date April 2009 Effective Date April 2009 Closing Date October 2010
Project
Description
The project aims to support the Iraqi authorities in the implementation of Phase I of the
“Iraq Banking Reform Strategy” (2008-2012) and its Action Plan, focusing on four
main components: (i) institutional and operational restructuring of the two state-owned
commercial banks; (ii) financial restructuring of the two state-owned commercial banks;
(iii) strengthening the regulatory and supervisory functions of the Central Bank of Iraq;
and (iv) project management, monitoring and evaluation.
Beneficiaries
The project supports the Iraqi government to build a sound banking system, able to
provide efficient financial services competitively. The immediate direct beneficiaries
would be the two largest state-owned commercial banks—Rafidain Bank and Rasheed
Bank—which account for more than 70 percent of the banking system. Ultimately, all
Iraqi businesses and citizens will benefit from an improved banking system that can
provide the resources needed for Iraq’s growth and offer good deposit and payment
systems for businesses and households.
Near Term
Employment
Creation
N/A
Strategic Context and Donor Coordination
The donor community has been active in helping Iraq in restructuring the banking sector. The World Bank
has been coordinating with all development partners involved in the banking reform, including the IMF,
EU, US Treasury, and Financial Services Volunteer Corps (FSVC). The IMF has taken the lead in
monetary activities and rebuilding the capacity of CBI. The US has focused mainly on the restructuring and
financial audits of the state-owned banks, and helping Iraq draft an operational restructuring plan. FSVC
provides technical assistance to CBI to strengthen its internal operations. The World Bank chairs an “Iraq
Banking Reform Donors Group”, to coordinate efforts, promote complementarity, and avoid overlap.
Project Development Objective
• Support Iraq’s implementation of Phase I of the Iraq Banking Sector Reform Strategy
• Strengthen the supervisory framework for financial intermediation
Outputs, Key Activities and Procurement
Outputs
• New organizational structures for the two state-owned banks are adopted
• Number of staff trained in each bank would reach at least 100 staff members
• Compliance supervisory and regulatory framework (Basle Code Principles)
Activities
• Plans for development of new organizational structures are completed, approved
and adopted
• Training in bank operations provided
Procurement
Goods: US$0.35 million
Consultants’ Services and Training: US$8.40million
Incremental Operating Expenses: US$0.75 million
Unallocated: US$0.50 million
Financial Data
Funds Committed US$0.2 million % approved 2
Funds Disbursed US$0.2 million % approved 2
Forecast Closing Date October 2010
Delay
(months)
0
Progress against indicators
Improvement in functioning of the two
state-owned commercial banks, evident in
the increase in loan-to-GDP ratios from
4% in June 2006 to 6% in October 2010.
Loan-to-GDP ratios
increased to reach 5% in
2009
% of planned
Build-up in provision levels at the two
state-owned commercial banks for new
loans, reflected in the reserves-to-NPLs
ratios, rising from 10% in June 2006 to
20% in October 2010.
The reserves-to-NPL
ratios raised from 10%
in June 2006 to reach
16% in 2009
Capital adequacy ratio in line with
prudential regulations, reaching up to 4%
by October 2010.
Capital adequacy ratio
reached 4% in 2009
Number of staff trained to do bank
operation
Number of staff trained
to do bank operations
reached 4 in 2009
Qualitative Assessment of Project Performance
Good progress has been made to date towards the objectives laid out by the GOI in its Banking Reform
Strategy. Some achievements have been made in terms of the institutional, operational and financial
restructuring of the two state-owned commercial banks. These include the improvement of the business
organization and the upgrading of the information technology infrastructure to connect bank branches with
Central Bank of Iraq (CBI). On financial restructuring of the two state-owned banks, the MOF in
coordination with CBI have reduced the problem of non-performing loans (NPL), which have dropped by
20% in June 2007. In terms of project management, monitoring and evaluation, the PMU has been
established and well equipped with competent staff, and the required furniture and technology.
Major Implementation Obstacles
Due to the short lifetime of the project, there is likelihood to extend the project closing date.