Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Financial Sector Modernization and Information Management System (P088759) EAST ASIA AND PACIFIC | Vietnam | Finance & Markets Global Practice | IBRD/IDA | Specific Investment Loan | FY 2009 | Seq No: 14 | ARCHIVED on 16-Jun-2017 | ISR26781 | Implementing Agencies: The State Bank of Vietnam, The Socialist Republic of Vietnam Key Dates Key Project Dates Bank Approval Date:30-Oct-2008 Effectiveness Date:20-Jul-2009 Planned Mid Term Review Date:22-Apr-2013 Actual Mid-Term Review Date:17-May-2013 Original Closing Date:31-Dec-2014 Revised Closing Date:31-Dec-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to assist the State Bank of Vietnam, the Credit Information Center and the Deposit Insurance of Vietnam to improve the delivery of their main functions in accordance with relevant international standards for the banking sector, through (a) developing a centralized and integrated system of advanced business processes and a modern information technology architecture; and (b) strengthening their institutional capacity in carrying out their operations. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name SBV Component 1 - Functional Strengthening and Business Re-engineering:(Cost $7.89 M) SBV Component 2 - ICT Platform Development:(Cost $34.56 M) SBV Component 3 - Project Implementation Management:(Cost $2.48 M) CIC Component 1 - Business Process Re-engineering:(Cost $0.47 M) CIC Component 2 - ICT Platform Development:(Cost $6.74 M) DIV Component 1 - Business Process Re-engineering:(Cost $1.50 M) DIV Component 2 - ICT Platform Development:(Cost $14.52 M) DIV Component 3 - Project Implementation Management:(Cost $0.80 M) Overall Ratings 6/16/2017 Page 1 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions There has been a good progress in the Project implementation - 6 out of 7 major IT system packages are operational and the users are reporting several benefits, such as availability of more timely and accurate information, upgraded core functional capacity, improved work efficiency, etc. To date, the IDA credit has disbursed US$42 million, which is 74.3 percent of the Project’s US$ equivalent amount. The CIC and DIV components have become fully operational and are already delivering benefits. The Project's Development Objective remains valid and achievable by December 31, 2017. 6/16/2017 Page 2 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating 6/16/2017 Page 3 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Political and Governance  --  Moderate  Moderate Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Moderate  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Strengthened main functions of SBV (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New reports/templates New reports/templates Indicator is met have been prepared have been prepared and Large gaps between SBV as confirmed by and respective Circulas respective Circulas have Value practices and international the end targets have been finalized. been finalized. IT practices of sub- Implementation of IT solutions developed and indicators. solutions is in process. operational Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Strengthened SBV Accounting Function (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Presentation, Presentation, Presentation, consolidation and consolidation Presentation of SBV consolidation and timeliness of SBV's and timeliness financial statements timeliness of SBV's financial statements in of SBV’s without notes to financial financial statements in line with both Vietnam financial statements. Difficulties in line with both Vietnam Accounting standards statements in consolidating central Accounting standards (VAS) and SBV line with both Value banking operations and (VAS) and SBV management Vietnam branch operations. No management requirements. System is Accounting daily balance sheet and requirements. System based on real-time Standards submission of monthly is based on real-time settlements and financial (VAS) and SBV balance sheet to IMF with settlements and statements are management a 12-week lag. financial statements consolidated daily. requirements are consolidated daily. Financial statements are on the one also in accordance with hand, and 6/16/2017 Page 4 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) international practices international and standards practices and applicable to central standards banks. applicable to central banks on the other, in particular in terms of provision of consolidated financial statements in accordance with statutory requirements of Vietnam. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Strengthened SBV Supervision Function (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target BSA has conducted measures to improve supervision in line with international standards and characteristics of Credit Institutions in Vietnam, particularly: - SBV (BSA) issued the According to SBV's Circular 41/2016/TT- own assessment - NHNN on 30/12/2016 offsite supervision regulating capital partially compliant with adequacy for banks and Compliance BCPs #16-20. This branches of foreign with BCP needs to be verified by banks from 2020 principles on reviewing the standard onwards. Accordingly, offsite reports after new IT calculation of capital surveillance Materially noncompliant system (BSA's own adequacy is complied improved, in Value with the BCPs on offsite development and SG4) with Basel II (accounted particular supervision. is launched. ST1 for operational risks and regarding consultant has market risk, credit risk regular offsite proposed including counterparty supervision improvements which credit risk). In the first reporting of have been stage, Credit Institutions banks’ risk incorporated into will use standard profiles bidding documents of method to measure BSA's own risks. development package. - During Quarter I- 2017, BSA coordinated with BRASS to organize training course in order to improve knowledge about risks (credit, market and operations) as well as SBV orientation in 6/16/2017 Page 5 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) implementation of Basel II for Credit Institutions and branches of foreign banks. - BSA has continued implementing the project of Information System in support of off-site supervision following the Decision of SBV Governor from May 2017 in order to fulfill the information system in support to improved supervision. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Strengthened SBV Policy Function (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Accuracy of reports: The validation formulas of SG4 are also devised to automatically validate more reports which will contribute to the statistical report quality. Consistence: Improved + Monetary balance sheet: SBV can provide key items on the Statistics monetary balance sheet Inflation forecasting accuracy and Lack of sectorization of to IMF with reports have been consistency bank credit and coverage categorization in lower developed and report improved; of certain loans and level i.e. items about templates related to monthly financial leases in outstanding credit, risk contagion control monetary particular regarding state capital mobilization, on interbank market survey Value sector. Reports (6) bonds investment. have been entered into submitted to submitted to IMF with a lag + Balance of Payments: the data management IMF; and of 10-12 weeks. No regular at the present, BOP is system (SG4). Pilot results of two publication of basic made by SBV based on has been launched. research statistics and research statistical report about Full implementation is programs results. borrowing, repayment of in progress. regularly foreign loans; direct published. investment of Viet Nam to abroad and the direct oversea investment into Viet Nam; and statistical data on monetary balance sheets of SBV, credit institutions. Almost items on BOP are set by SBV following the guidance of BPM6 except the goods 6/16/2017 Page 6 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) balance and service balance because these items are managed and collected by other Government agencies. - Providing monetary balance sheet: At reporting time, SBV continues providing to IMF monetary balance sheet of SBV, Credit institutions and overall banking industry on a monthly basis and BOP on quarterly basis. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Improved credit information provided by CIC (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The new CIC data management and credit reporting system has become fully operational in March 2016. It has reduced the response time to queries on borrower credit from over 20 seconds to less than 10 seconds, as the reports were Credit automatically information generated by the data Information on credit and provided by mat. The coverage of borrowers considered CIC is credit reports limited by users. No data The credit information comprehensive, significantly expanded reliability control system is in compliance covering Value from generic mechanism in place. Rich with OECD best repayment information only to data on general evolution practices history, unpaid detailed, of credit and total exposer debts or credit comprehensive by CI not utilized by SBV. outstanding by information by borrower andby borrower. The data contract. reliability improved through the automatic data validation and as a result, the daily volume of transactions increased from 7,000 queries before the Project to over 20,000 queries now. With the rapid increase of revenue, the CIC was able to reduce the fees 6/16/2017 Page 7 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) charged for queries by credit institutions. The Project indicator is met. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2016 PHINDPDOTBL  Enhanced risk management of DIV (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target All systems operational. Financial Stability Forum, the International Work Group about The whole DIV Deposit Insurance operational system issued the guidelines to went live in October develop an effective 2016. The early deposit insurance Indicator is met Current systems and benefits already system. DIV will as confirmed by capacity not tested for recorded - timely Value evaluate and the end targets bank risk assessment and information on the demonstrate that the of sub- payouts for banks. company's operational FSMIMS project indicators. and financial status, implemented the enhanced ability of guidelines in the insurance payout in the independent completion case of bank failure. report; the index of Project result will be shown in the project completion report. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Coverage of risk exposure assessment (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Coverage of risk exposure assessment improved in line with the Coverage of risk exposure recommendatio The whole operational The whole operational assessment is insufficient ns of the Value system went live in system went live in and is not aligned with International October, 2016. October, 2016. global good practices Working Group on Deposit Insurance under the Financial Stability Forum 6/16/2017 Page 8 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDPDOTBL  Risk assessment reports (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Risk Risk assessment reports assessment are materially short in Software applications Software applications reports cover Value covering all aspects of DIV now operational. now operational. all material exposures, due to lack of aspects of DIV information resources exposures Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 Overall Comments Intermediate Results Indicators PHINDIRITBL  Functions strengthened and business processes re-engineered (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Main functions strengthened as evidence in improved quality of 2-3 Pachwork of regulations important work and operational directives program more suited to outputs, and administrative control Lack New business New business main business of polcies and procedures processes have been processes have been processes re- Value to guide and evaluate designed and designed and developed engineered”. operation No basic central developed and outputs and outputs have been Important work bank research program Ad have been delivered. delivered. program hoc training without outputs and comprehensive medium- main business ter perspective processes includes: Open Market Operation; Inflation 6/16/2017 Page 9 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Targeting and Forecasting; New Accounting and Finance Blueprint; New chart of account. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2016 PHINDIRITBL  Medium-term training program implemented by SBV (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Training program on Training program on Ad hoc staff training new operational new operational Medium-term without comprehensive processes was processes was training Value medium-term program conducted by ST1 conducted by ST1 program based on solid skills gap consultant and training consultant and all implemented by analysis. courses were training courses were SBV completed in 2013. completed in 2013. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2016 PHINDIRITBL  Research program adopted by SBV (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Research SBV continues with SBV continues with program on 02 implementation of the implementation of the topics inflation forecasting inflation forecasting implemented: research program in research program in (i) Inflation Vietnam (lead by FSD) Vietnam (lead by FSD) forecasting in and risk contagion and risk contagion Vietnam and (ii) research program on research program on Assessing level interbank market (lead interbank market (lead of risk Limited research and by CBD). The FSD by CBD). The FSD contagion in the Value statistic capacity. complies with the 8- complies with the 8-step interbank step process of process of inflation market in inflation forecasting as forecasting as Vietnam recommended by E&Y recommended by E&Y through matrix Consultant. The Consultant. The of funding forecasting results forecasting results relationships included in monthly, included in monthly, between CIs, quarterly and annual quarterly and annual branches of publications. publications. foreign banks - SBV”. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 6/16/2017 Page 10 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) PHINDIRITBL  New/revised regulations and operational policies and procedures implemented (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target SBV has issued Circular no. 19/2015/TT-NHNN on SBV has issued Circular the chart of accounts no. 19/2015/TT-NHNN and is gathering on the chart of accounts contributions of relating and is gathering units on the accounting contributions of relating document circulation units on the accounting procedures, document circulation instructions on data procedures, instructions migration, financial on data migration, statement financial statement development. Issuance development. Issuance of legal documents of legal documents Patchwork of existing completed. completed. New/revised regulations and operational New circular replacing New circular replacing regulations and policies/procedures mainly Circular 31/2013/TT- Circular 31/2013/TT- operational as responses to NHNN regulating NHNN regulating policies and Value administrative statistical reports statistical reports applied procedures requirements. New applied for SBV for SBV branches, CIs, implemented by practices/products adopted branches, CIs, branches of foreign- SBV, CIC and without opeqartional branches of foreign- owned banks has been DIV guidelines. owned banks has been issued. issued. CIC has issued 3 new CIC has issued 3 new operating procedures (i) operating procedures complaint dealing (i) complaint dealing process, (ii) registration process, (ii) registration and provision of clients’ and provision of clients’ credit reports integrated credit reports with client rating, (iii) integrated with client procedure of debt rating, (iii) procedure of overdue information debt overdue provision in compliance information provision in with Circular 02. compliance with Circular 02. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDIRITBL  Centralized ICT platform established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Centralized ICT platform established in Implementation vendor Dispersed and semi- Centralized IT platform line with the for the new IT structure automatic systems led to become operational in adopted Value is in place, and the inefficiency and weak risk January, 2017 and is conceptual process is showing control functioning smoothly. designs of the good progress. ICT architecture by SBV, CIC and 6/16/2017 Page 11 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) DIV. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDIRITBL  System implementation verified by a 3rd party consultant (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target SBV has employed SBV has employed ST3 ST3 consultant to verify consultant to verify ICT ICT systems under systems under SBV and SBV and CIC CIC components. DIV components. DT3 has chosen 3rd party consultant ST3 (PWC) to implement Contract implementation consultant to verify validation of the system System for system supply and CG1 system before deployment result. ST3 implementation installation subject to 3rd contract liquidation. Value has verified the 2 verified by a party verification before DIV has chosen 3rd completely go-live 3rd party any system is accepteb by party to implement systems (CG1 and consultant. SBV, CIC and DIV. validation of the system SG1.1). The DIV deployment result. ST3 component has been has verified the 2 verified and also advised completely go-live on the cyber-security systems (CG1 and aspects. SG1.1). Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDIRITBL  Automated and operational procedures in place (Text, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Systems within project Systems within project scope under SBV and scope under SBV and DIV components are DIV components are Automated and installed, administered installed, administered operational and exploited in and exploited in procedures in Centralized overall system centralized systems of centralized systems of place to detect architecture accepted but software and hardware software and hardware inconsistencies particular attention to Value and ICT platform is and ICT platform is or errors in transitional arrangements established in established in information needed in detailed system compliance with the compliance with the provision and design. adopted conceptual adopted conceptual transmission for designs. Automation of designs. All systems SBV, DIV and systems will be tested except SG3.2 have CIC. in SIT, UAT, OAT and reached the "Go-live" Go-live phases. Both milestones. Both the 6/16/2017 Page 12 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) the CIC and DIV CIC and DIV component component have have become become operational. operational. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2017 PHINDIRITBL  Management and staff trained in new practices, processes and products (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target At functional At functional strengthening phase, strengthening phase, SBV, CIC and DIV staff SBV, CIC and DIV staff participated in training participated in training courses on new courses on new operational processes operational processes by ST1 consultant by ST1 consultant (under SBV, CIC Management (under SBV, CIC component) and DT1 and staff component) and DT1 consultant (under DIV trained in new consultant (under DIV component). All regulations, component). All training training courses were operational courses were completed completed in 2013. policies, in 2013. Management and staff In addition, under ST7 application In addition, under ST7 unfamiliar with Contract, KDi Asia tools, and IT Contract, KDi Asia Value international practices of delivered several skills related to delivered several data management and training courses in new data training courses in 2015 related IT 2015 for SBV and management for SBV and Credit Credit Institutions. system. All Institutions. Contractors continue related Contractors continue deliveing training professional deliveing training courses for and IT training courses for professional professional staff and activities staff and technical staff technical staff of SBV completed. of SBV departments at departments at headquarters and headquarters and branches on the new branches on the new systems, and do the systems, and do the technology transfer for technology transfer for users. users. Date 01-Nov-2008 11-Nov-2016 18-May-2017 31-Dec-2016 Overall Comments 6/16/2017 Page 13 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P088759 IDA-45050 Effective USD 60.00 60.00 0.00 42.00 12.58 70% P088759 TF-93085 Closed USD 0.83 0.83 0.00 0.83 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P088759 IDA-45050 Effective 30-Oct-2008 21-Apr-2009 20-Jul-2009 31-Dec-2014 31-Dec-2017 P088759 TF-93085 Closed 21-Apr-2009 21-Apr-2009 21-Apr-2009 31-Dec-2014 31-Dec-2014 Cumulative Disbursements Restructuring History Level Approved on 23-Aug-2010 ,Level 2 Approved on 22-Dec-2014 ,Level 2 Approved on 29-Dec-2016 6/16/2017 Page 14 of 15 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Financial Sector Modernization and Information Management System (P088759) Related Project(s) There are no related projects. 6/16/2017 Page 15 of 15 Public Disclosure Copy