22 International Financial Managemen
There are ad hoc and standing committees appointed by the Board
Governors and Executive Board. There is also an interim committe
appointed by the Board of Governors.
The apex body of IMF is the Board of Governors, Itis comprised
one Goverior and/one alternate Governor appointed by each meme:
country. Normally the minister of finance or the governor of cent
bank of a country acts as its Governor at the IMF. The alterna
Governor can participate in the deliberations -of the Board
Governors but he ean have the voting right only in the absence of
Governor.
‘The meeting of the Board of Governors takes place once a yea
which the detailed account of the activities of the Fund in the previow
Year is presented. The decisions regarding the policies of the Fund are
also taken at the annual meeting. Special meeting of the Board »
Sevemors can be convened by any ofthe five member countries having
25.percent or more of the total voting rights,
Apart from the Board of Governors, another decision making
organ of the IMF has been the Executive Board. In practice, the
inaicrity of the decision-making powers of the Board of Governors have
been delegated to the Board of Executive Directors. ‘These inclu
decisions on the access of the members to the resources of the Fund
decisions, on charges. and. remunerations and the review “i
consultations between the Fund and its members. The decisions o
Board of Governors or the Executive Board are binding upon the
member countries
‘The Executive: Board is constituted by 21 members. Fiv
executive directors are the appointees of the five members eountri,
having the largest quotas (U.S.A., U.K, Germany, France and Japan)
Saudi Arabia, appoints a sixth Executive Director'on account of ite
being ane ofthe two largest contributors to the Fund. Tho remaining
executive directors are elected by the momber countries for a period of
vo years roughly on a geographical basis. The Board of Executive
Directors elects a Managing Director, who is usually a politician or an
important international official. Managing Director is the non-voting
Chairman of the Board of Executive Directors, The Executive Board is
the mest powerful organ of the Fund. It exercises vast powers
conferved on it by the Articles of Agreement and the powers delegated
to it by the Board of Governors. These powers are connected with ail
the financial activities of the Fund apart from the regulatory and
Supervisory powers. The Executive Board meets several times a week
and is, therefore, supposed to be in continuous session
‘The Managing Director apart from acting as the chairman of the
Executive Board is responsible also for the organisation and
administration of the personnel of the Fund.
(Financial Management
ecision making; body appoint
ibeen the Interim Committee whict
Fhe Second Amendment to the Ar
Seastitution of a council “by a decis
ea with an 85 percent majority of th
Be states of the Fund.”
'Quotas
g the member of the IMF, a cot
iption, its voting power and its «
Glause that the subscription quota
B= @) 2 percent of national income,
ies (iit) 10 percent of average ant
ym variation in annual exports a
Ge) increased by the percentage ratia
national income, The subscription ¢
‘of that amount of subseription m
iBhe form of gold or the U.S, dollars (
andU.S. do!lars with the country,
the remaining amount is payable in te
ithe country concerned. The subseripti
He quota constitutes the so-called ‘go
quota composed of national currenci
he so-called ‘credit tranche. Thesubsei
Geuntries taken together determine #
SF the Fund. The total subseription
FES billion. By 1993, it had grown to$
@) The Fund was delinked from gold in
Eeeping gold reserves with the Fund
@ member country maintains the sub
fewn currency and in terms of Speci
quotas of the member countries are re
ily the U.S. quota was the largest ¢
Fespective quotas of the five leading
ntly at 21 percent for the U.S.A., at 7p
for Germany and at 5 percent each for
jerof the member states and their be
fspon the quotas allocated to them,
+ The major functions of the IMF
Fund operates a5 a short-torm credit
ets as a reservoir of the currencies
A borrowing country can borrow the ¢
of this reservoir.
{The IMF is like a lending institution in f
Tens in forcign oxchange to the met