IMF

WORLD BANK
 INTERNATIONAL MONITARY FUND
• What is IMF???
• It is an organization of 186 countries, working
to faster global monetary cooperation, secure
financial stability, facilitate international trade,
promote high employment and sustainable
economic growth and reduce poverty
 The International Monetary Fund was created in July
1944, originally with 45 members, with a goal to
stabilize exchange rates and assist the reconstruction
of the world's international payment system. Countries
contributed to a pool which could be borrowed from,
on a temporary basis, by countries with payment
imbalances. (Condon, 2007)

Headquarters in Washington D.C.

International Monetary Fund (IMF) Managing

Director Dominique Strauss-Kahn (R) briefs
journalists on the outcomes of the International
Financial Monetary and Financial Committee
meeting with Egyptian Finance Minister and
International Monetary and Financial Committee
(IMFC) Chairman Youssef Boutros-Ghali (M), and
IMF First Deputy Managing Director John Lipsky
(L); April 25, 2009 at IMF Headquarters in
Washington, DC.
 Who runs the IMF?
Member Countries

Board of Governors

Executive Board

IMF Managing Directors

First Deputy Managing Dir

Deputy Managing Deputy Managing
Dir Dir
 MEMBERSHIP
• Original members: All those countries whose
representatives took part in BRETTONWOODS
CONFERENCE and who agreed to be the
members of the fund prior to 31st December
1945
• Ordinary members: All those who became
members subsequently
 Objectives of IMF
• International monetary co operation
• To facilitate expansion and balanced growth of
international trade
• To promote exchange stability
• Generating higher employment and income
• Abolition of exchange restriction
• AID to members during emergency
 Functions of IMF
• Determining rate of exchange by every
country
• Fund lending
• Credit tranches
• A central Bank’s bank
• Training and technical assistance
• Consultancy role
 Achievements of IMF
• International monetary co operation
• Exchange stability
• Checking competitive depreciation
• Increased assistance
• Increase in capital resources
• Expansion of trade
 Advantages to INDIA
• Financial Assistance from the fund
• Helps in foreign exchange crisis
• Membership of the world bank
• Economic consultation
 Relationship between IMF and INDIA
• The relationship between the IMF and India has grown
strong over the years. In fact, the country has turned into a
creditor to the IMF. India and IMF must continue to boost
their relationship this way, as it will prove to be
advantageous for both.
• The International Monetary Fund, or IMF, predicted lower
growth in India and economic contractions in the US, Japan
and euro region next year, calling for further interest rate
cuts and fiscal stimulus.
• India recorded a GDP growth of 9.8% in 2006 and 9.3% in
2007. Its estimate for India’s growth in 2009 is now 6.3%.
 Conclusion…
The IMF’s primary purpose is to safeguard the stability of the international monetary
system—the system of exchange rates and international payments that enables countries
(and their citizens) to buy goods and services from each other. This is essential for
achieving sustainable economic growth and raising living standards.

 providing advice to members on adopting policies that can help them prevent or
resolve a financial crisis, achieve macroeconomic stability, accelerate economic
growth, and alleviate poverty;
 making financing temporarily available to member countries to help them address
balance of payments problems—that is, when they find themselves short of foreign
exchange because their payments to other countries exceed their foreign exchange
earnings; and
 offering technical assistance and training to countries at their request, to help them
build the expertise and institutions they need to implement sound economic policies.
 Introduction

• The World Bank is an international financial institution that

provides loans to developing countries for capital programs.

• The World Bank's official goal is the reduction of poverty.

• The World Bank is a lending institution that funds essential

infrastructural requirement, globally.

• The World Bank differs from the World Bank Group, in that the
World Bank comprises only two institutions: the International
Bank for Reconstruction and Development (IBRD) and the
International Development Association (IDA)
 At a glance

• NAME : WORLD BANK

• H.Q. : WASHINGTON D.C.
• ESTD. : 27 DEC 1945
: 188 countries (IBRD)
• Membership
172 countries (IDA)
• CURRENT PRESIDENT : JIM YONG KIM
• STAFF : 10000 IN 100 COUNRIES
• AUTHORIZED CAPITAL : $184 BILLION
• FINANCIAL SOURCES : BORROWING ON
INTERNATIONAL
MARKET
 History

• Conceived during World War II (July, 1944) at Bretton Woods, New

Hampshire.

• 1944 – 1968 : Bank president John McCloy selected France to be

first recipient of World Bank aid. The loan was for US$250 million.

• 1968 – 1980 : The bank concentrated on meeting the basic needs of

people in the developing world. The size and number of loans to
borrowers was greatly increased as loan targets expanded from
infrastructure into social services and other sectors.

• Initially was called the International Bank for Reconstruction and

Development (IBRD). Now is called the “World Bank Group
 Functions
• The Bank Group uses financial resources and extensive
experience to help poor nations reduce poverty, increase
economic growth, and improve the quality of life.

• World Bank provides technical and financial assistance

to underdeveloped nations for development schemes like
building roads, schools, hospitals, etc. The main aim is to
eliminate poverty from the world

• Current global challenges include the financial crisis,

high food prices, and climate change.
 WORKING GROUPS OF WORLD BANK

• International Bank for Reconstruction and Development

(IBRD)

• International Development Association (IDA)

• International Finance Corporation (IFC)

• Multilateral Investment Guarantee Agency (MIGA)

• International Centre for Settlement of Investment Disputes

(ICSID)
•The International Bank for Reconstruction and Development
(IBRD) lends to governments of middle-income and creditworthy
low-income countrie

• The International Development Association (IDA) provides

interest-free loans—called credits— and grants to governments
of the poorest countries.
•The International Finance Corporation (IFC) provides loans,
equity and technical assistance to stimulate private sector
investment in developing countries

•The Multilateral Investment Guarantee Agency (MIGA) provides

guarantees against losses caused by non-commercial risks to
investors in developing countries
The International Centre for Settlement of Investment Disputes
(ICSID) provides international facilities for conciliation and
arbitration of investment disputes.
• The Executive Directors, representing the Bank's member countries,
make up the Board of Directors, usually meeting twice a week to
oversee activities such as the approval of loans and guarantees, new
policies, the administrative budget, country assistance strategies and
borrowing and financing decisions.
• The Vice Presidents of the Bank are its principal managers, in charge
of regions, sectors, networks and functions. There are 24 Vice-
Presidents, three Senior Vice Presidents and two Executive Vice
Presidents.

Jim Yong Kim, M.D., Ph.D., became the 12th President of the World Bank
Group on July 1, 2012

Chief Economist – Kaushik Basu (September 2012),an Indian economist, is the

chief economist and senior vice president of the world bank
 WORLD BANK IN INDIA
• The World Bank's work plan in India is spelt out in its Country
Strategy (CAS).

• The Country Strategy for India for 2009-2012 is aligned with the
government's Eleventh Five Year Plan.

• It focuses on helping the country to fast-track the development of

much-needed infrastructure, support the seven poorest states, and
respond to the financial crisis.

• The strategy envisages total proposed lending of US$14 billion for

2009 - 2012.

• The strategy is implemented through lending, dialogue, analytical

work, engagement with the private sector, and capacity building
exercises.
 SUPPORT TO INDIA
• India has been borrowing from the World Bank through IBRD and IDA for
various development projects in the area of poverty alleviations,
infrastructure, rural developments etc.

• IDA funds are one of the most concessional external loans for GoI and are
used largely in social sector projects that contribute to the achievement of
Millennium Development Goals.

• India has borrowed around US$ 65.8 billion from the World Bank so far.

• In 1958, the Bank played an important role in establishing ‘India Aid Club’
for providing specific economic assistances to India. It has now been renamed
as ‘India Development Forum’.

• International Development Association (IDA), an associate of World Bank is

known as the soft loan window of the Bank and was established on
September 24, 1960.

• During 1995-96 (July-June), India ranked first among the nations getting
assistance from IDA.
 PROJECTS
• The World Bank Group’s Partnership Strategy for India
(2013-2017) will help India lay the foundations for
achieving “faster, sustainable, and more inclusive
growth” as outlined in the government’s 12th five year
plan.
• The World Bank Group will support India with an
integrated package of financing, advisory services, and
knowledge. During the World Bank financial year (July
2013-June 2014), funding for India was $5.2 billion
($2.0 billion in International Bank for Reconstruction
and Development (IBRD), $3.1 billion in International
Development Association and $0.1 billion in CTF or
Clean Technology Fund) across 16 projects.
 VOTING POWER
• In 2010, voting powers at the World Bank were revised to increase the voice
of developing countries, notably China. The countries with most voting
power are now the United
States (15.85%), Japan(6.84%), China (4.42%), Germany (4.00%),
the United Kingdom (3.75%), France (3.75%), and India (2.91%).

• Under the changes, known as 'Voice Reform - Phase 2', countries other than
China that saw significant gains included South
Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most
developed countries' voting power was reduced, along with a few poor
countries such as Nigeria. The voting powers of the United
States, Russia and Saudi Arabia were unchanged.
THANK U!!