Sri Lanka Financial Sector Modernization Project

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The development objective of the Financial Sector Modernization Project for Srilanka is to contribute to increasing financial market efficiency and use of financial services among micro, small and medium enterprises (MSMEs) and individuals. The project comprises of three components. The first component, supporting selected mid-level reforms through results-based financing implements of selected mid-level reforms through disbursement-linked indicators (DLIs) enables successful implementation of component 2 and thus, reinforces the overall positive impact of the project. The second component, strengthening regulators’ institutional capacity, upgrading the legal and regulatory framework and modernizing financial market infrastructure aims to strengthen the institutional capacity of the financial sector regulators. It consists of following three sub-components: (i) strengthening the capacity of Central Bank of Sri Lanka (CBSL) for supervision and regulation, and modernizing relevant financial infrastructure, (ii) strengthening the capacity of Securities and Exchange Commission of Sri Lanka (SEC) for supervision and regulation, and modernizing relevant financial infrastructure, (iii) strengthening the capacity of Insurance Board of Sri Lanka (IBSL) for supervision and regulation, and modernizing relevant financial infrastructure. The third component, project implementation and monitoring aims to provide support to the Project Steering Committee (PSC) and Central Project Coordination Unit (CPCU) to guide and coordinate project operations, financial management (FM), procurement, social and environmental issues, and M&E under the project.