Syrian Arab Republic - Financial Sector Modernization Project

Overview & Synopsis

The development objective of the Syria Financial Sector Modernization Project for the Syrian Arab Republic is to strengthen foundational systems and institutional capacity for financial sector modernization. In a context of fragility, conflict, and macroeconomic uncertainty, the operation responds to the urgent need to restore trusted, efficient financial flows, rebuild confidence in formal channels, and lay credible foundations for banking sector rehabilitation and financial inclusion. The Bank will work on modernizing payments and core financial infrastructure through deployment of a Central Bank of Syria core banking platform, an integrated Automated Transfer System combining Real Time Gross Settlement and Automated Clearing House functions, a Central Securities Depository, a Fast Payments System for instant account-to-account transfers, a national card and QR routing switch, secure communications, cybersecurity, business continuity and disaster recovery, and an interoperability framework that connects banks, payment service providers, and government payment interfaces; it will also support preparatory credit infrastructure (including credit information sharing, secured transactions, and collateral valuation) and targeted regulatory and operational measures to enable safe uptake. The Bank will strengthen supervisory, integrity, and financial stability systems by financing system-wide Asset Quality Reviews conducted by independent firms, follow-up methodologies and option frameworks for supervision, crisis-management and deposit insurance readiness, and risk-based financial integrity capabilities for the Financial Intelligence Unit and the central bank, including suspicious transaction reporting, secure data exchange, and AML/CFT analytics; supervisory technology (SupTech) will be introduced beginning with modern reporting, data ingestion and validation, and priority analytics and workflow tools. Project implementation support will establish a dedicated unit at the central bank, sequence complex procurements, embed knowledge transfer and change management, and include a Contingent Emergency Response Component for adaptive crisis response. The project intends to accomplish the operationalization and use of foundational payment and supervisory systems, increased active use of digital payment services by people and businesses including women users, completion of risk-based prudential and AML/CFT supervisory reviews using project-supported tools, and a credible evidence base for banking sector soundness through full coverage of Asset Quality Reviews and subsequent supervisory actions, thereby restoring reliable, transparent financial flows across public, private, and humanitarian channels and enabling gradual reintermediation, financial inclusion, and macro-financial stability.