Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) LATIN AMERICA AND CARIBBEAN | Guyana | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Development Policy Lending | FY 2018 | Seq No: 1 | ARCHIVED on 28-Jun-2019 | ISR37316 | Implementing Agencies: Ministry of Finance, The Co-operative Republic of Guyana Key Dates Key Project Dates Bank Approval Date:22-Jun-2018 Effectiveness Date:22-Aug-2018 Planned Mid Term Review Date:-- Actual Mid-Term Review Date:-- Original Closing Date:30-Jun-2019 Revised Closing Date:30-Jun-2019 Program Development Objectives Program Development Objective (from Program Document) Promote Sound Financial Development and Strengthen Fiscal Management PHRPDODEL Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  --  Moderately Satisfactory Overall Implementation Progress (IP)  --  Moderately Satisfactory Overall Risk Rating  --  Substantial Implementation Status and Key Decisions Authorities made strong progress toward the development objectives including enactment of key legislation since Board approval. The Deposit Insurance Act, the National Payments System Act, as well as amendments to the Financial Institutions Act and the Bank of Guyana Act passed through Parliament in July 2018. Implementation is also well underway supported in part by World Bank technical assistance and in part by an investment loan for payments system development. The most important achievements include: Pillar I: Strengthen Financial Stability and Depositor Protection • Amendment to Part VIII (failed bank resolution) of the Financial Institutions Act 1995 was passed in the National Assembly on July 12, 2018. This amendment modified the bank resolution framework and aligned it with regional and global good practices. It introduces a more efficient administrative procedure compared to the court administered procedure, which has proven to be protracted resulting in loss to depositors and shareholders. 6/28/2019 Page 1 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) • Deposit Insurance Act of 2018 was passed in the National Assembly on July 13, 2018. The Act establishes a Deposit Insurance Scheme for the protection of insured depositors comprising a Deposit Insurance Fund and a Deposit Insurance Corporation responsible for managing the Fund and other related purposes. The Minister of Finance issued a commencement order for the Deposit Insurance Act 2018 to go into force in early April 2019. • Amendment to the Bank of Guyana Act on Emergency Liquidity Assistance was passed in the National Assembly on July 13, 2018. The amendment provides a proper/statutory basis for an Emergency Liquidity Assistance (ELA) framework and explicitly allows the Bank of Guyana (BoG) to provide ELA. Pillar II: Enable Sound Financial Development • The Insurance Act 2016, enacted in 2016, was brought into operation on April 16, 2018 via a commencement order issued by the Minister of Finance. The Act enhances the supervisory powers and responsibilities of the BoG and also provides for a risk-based approach to the supervision of insurance in Guyana, the promotion of competition in the insurance industry and the protection of consumers is supported by comprehensive implementing regulations. These regulations were promulgated on April 17, 2018. • The National Payments System Act, which creates a sound legal framework for the operation and oversight of the payments system in Guyana and facilitates its effective modernization, was passed in July 2018. The National Payments System Act incorporates a comprehensive set of provisions on important aspects of the payments system. It defines the ambit of the “payments system” and articulates, in detail, the role and functions of the BoG in regulation and oversight of the payments system including the authority for regulating and overseeing activities related to processing, clearing and settlement. • The Anti-Money Laundering and Countering the Financing of Terrorism Act of 2009 was amended in September 2018. The amendment includes, among others, the establishment of a high-level Anti-Money Laundering and Countering the Financing of Terrorism and Proliferation Financing National Coordination Co-Committee. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  Substantial  --  High Macroeconomic  Substantial  --  Substantial Sector Strategies and Policies  Moderate  --  Moderate Technical Design of Project or Program  Moderate  --  Moderate Institutional Capacity for Implementation and Sustainability  Substantial  --  Substantial Fiduciary  Substantial  --  Substantial Environment and Social  Moderate  --  Moderate Stakeholders  Moderate  --  Moderate Other  Moderate  --  -- Overall  Substantial  --  Substantial Results 6/28/2019 Page 2 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) Results Indicators PHINDIRITBL Indicator a: Operational procedures in place to undertake resolution with modern tools including purchase and assumption options (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The amendment to Part VIII (failed bank resolution) of the Financial Institutions Act of 1995, was passed in the National Assembly BOG on July 12, 2018. The Resolution amendment modified the Committee is bank resolution established, framework and brings it Only court administered and internal in line with international Value liquidation is available as a -- procedural good practices. Six resolution tool guidelines and regulations for policies, operationalizing the documented, bank resolution tools approved and (incl. purchase-and- in effect. assumption) have been drafted, with support from the World Bank, and are currently being reviewed and finalized. Date 31-Dec-2017 -- 10-Jun-2019 30-Jun-2020 PHINDIRITBL  Indicator b: Share of eligible deposit clients falling within the stipulated coverage, excluding financial institution deposits, are fully covered by deposit insurance (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Deposit Insurance Act was passed in the National Assembly on July 13, 2018 and the Minister of Finance issued a commencement order for the Act to go into force in early April 2019. The Act establishes a 95 percent or Value 0 (no existing coverage) -- Deposit Insurance more deposit Scheme for the owners covered protection of insured depositors comprising a Deposit Insurance Fund and a Deposit Insurance Corporation responsible for managing the Fund and other related purposes. The Scheme is currently being 6/28/2019 Page 3 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) operationalized: A Circular on the payment of initial contribution (along with the reporting template) was sent to the members to facilitate payment of initial contribution by July 3, 2019. Three staff from the BoG were seconded to the Deposit Insurance Corporation and a Board of Directors was appointed. Date 31-Dec-2017 -- 10-Jun-2019 30-Jun-2020 PHINDIRITBL  Indicator c: Emergency short term liquidity facilities activated and in place, and subject to eligibility for solvent but illiquid banks with sufficient collateral (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The amendment to the Bank of Guyana Act on Emergency Liquidity Assistance was passed in the National Assembly on July 13, 2018. The amendment provides a ELA facility is proper/statutory basis operational with for an Emergency improved Regulations and Liquidity Assistance collateral Value operational procedures for -- (ELA) framework and assets and time ELA not in place explicitly allows the BoG limits for use of to provide ELA. The the drafted regulation for instruments. operationalizing the framework and the supporting internal policy document with an application form for the BoG are currently being reviewed. Date 31-Dec-2017 -- 10-Jun-2019 30-Jun-2020 6/28/2019 Page 4 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) PHINDIRITBL  Indicator d: All licensed insurance companies meet the phased target of the new solvency requirement (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Three insurers (two general and one life) are below the minimum capital requirements. These companies are All 16 required to show annual insurance increases of 20 percent companies are Not available, as capital is of the required capital at 40 percent of Value not yet measured under -- amount to be fully the 2023 the new risk based regime compliant by the end regulatory 2023 (five year timeline). capital One of these companies requirement. has already shown an increase in its capital position due to shareholders injecting additional funds. Date 31-Dec-2016 -- 10-Jun-2019 30-Jun-2020 PHINDIRITBL  Indicator e: Cashless transactions through interbank facility (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The National Payments System Act, which created a sound legal framework for the operation and oversight of the payments system in Guyana and facilitates its effective modernization, was passed in July 2018. 200,000 per Value < 5,000 per year -- Four regulations year supporting the National Payments System Act have been drafted and are currently being reviewed by the Attorney General's office. Date 31-Dec-2017 -- 10-Jun-2019 30-Jun-2020 6/28/2019 Page 5 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report First Programmatic Financial and Fiscal Stability Development Policy Credit (P165425) PHINDIRITBL  Indicator f: The number of the Financial Intelligence Unit (FIU) intelligence reports referred to police for money laundering investigations (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 20 reports (10 new and 10 25 (June 2019- Value -- -- updates to existing cases) June 2020) Date 31-Dec-2017 -- -- 30-Jun-2020 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P165425 IDA-62860 Effective USD 35.00 35.00 0.00 34.21 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P165425 IDA-62860 Effective 22-Jun-2018 27-Jul-2018 22-Aug-2018 30-Jun-2019 30-Jun-2019 Tranches Restructuring History There has been no restructuring to date. Related Operations P167320-Second Programmatic Financial and Fiscal Stability Development Policy Credit 6/28/2019 Page 6 of 6 Public Disclosure Copy