International Bank for Reconstruction and Development (IBRD)

This ppt briefly explain International Bank for Reconstruction and Development (IBRD) which covers Basics, Members, Objectives of the World Bank and Funding & Functioning of the world bank.

1. Sundar B. N. Assistant Professor WORLD BANK/IBRD

2. Introduction The World Bank is a vital source of financial and technical assistance to developing countries around the world. It helps governments in developing countries reduce poverty by providing them with money and technical expertise they need for a wide range of projects– such as education, health, infrastructure, communications, government reforms, and for many other purposes. More than 9,000 development professionals from more than 168 countries in the world work at the Bank, in more than 100 Countries. The term "World Bank" refers only to the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The term "World Bank Group" incorporates five closely associated entities that work collaboratively toward poverty reduction: the World Bank (IBRD and IDA), and three other agencies, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).

3. Introduction The Bretton Woods twins refers to the two multilateral organizations created at Bretton Woods conference IBRD and IMF are The  International Bank for Reconstruction and Development  ( IBRD ) is an  international financial institution  that offers  loans  to middle-income  developing countries . The IBRD is the first of five member institutions that compose the  World Bank Group  and is headquartered in  Washington, D.C. , United States. It was established in 1944 with the mission of financing the reconstruction of European nations devastated by World War II.

4. Members of IBRD The Bank is like a co-operative in which 189 member countries are shareholders. Under the Articles of Agreement of the International Bank for Reconstruction and Development (IBRD), a country must first join the International Monetary Fund (IMF) prior to becoming a member of the Bank. Membership in IDA, IFC, and MIGA is conditioned upon membership in IBRD.

5. The Main Objectives of the World Bank are To promote private investment by means of guarantees on participation in loans and other investment to private members. To assist in reconstruction and development of the territories of its members. To encourage the development of productive resources in developing countries by supplying their capital. To promote long term balanced growth of international trade .

6. The Main Objectives of the World Bank are The IBRD provides financial services as well as strategic coordination and information services to its borrowing member countries The Bank offers flexible loans with maturities as long as 30 years and custom-tailored repayment scheduling. The IBRD also offers loans in  local currencies The Bank provides an array of financial risk management products including  foreign exchange swaps , currency conversions,  interest rate swaps , and  commodity swaps .

7. Funding & Functioning of the world bank The bank raises money in several different ways to support the low-interest and no-interest loans (credits) and grants that the World Bank (IBRD and IDA) offers to developing and poor countries. IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets. While IBRD earns a small margin on this lending, the greater proportion of income comes from lending out our own capital. This capital consists of reserves built up over the years and money paid in from the bank's 189 member country shareholders. IBRD income also pays for World Bank operating expenses and has contributed to IDA and debt relief.

8. Funding & Functioning of the world bank The bank also has US$178 billion in what is known as "callable capital," which could be drawn from shareholders as backing if needed to meet IBRD obligations for borrowings (bonds) or guarantees. IDA, the world's largest source of interest-free loans and grant assistance to the poorest countries, is replenished every three years by 40 donor countries. Additional funds are regenerated through repayments of loan principal on 35-to-40-year, no-interest loans, which are then available for re-lending. IDA accounts for nearly 40 percent of our lending.

9. Funding & Functioning of the world bank The bank often has a surplus at the end of the fiscal year, which is earned from the interest rates charged on some loans and from fees charged for its services. Some of the surplus goes to IDA–the part of the bank that provides grants and interest free loans to the world's poorest countries. The rest of the surplus is either used for debt relief for heavily indebted poor countries , added to financial reserves, or to respond to unforeseen humanitarian crises . There is an independent panel called World Bank Inspection Panel to help ensure that operations adhere to operational policies and procedures.

10. Organization These member countries, or shareholders, are represented by a Board of Governors , who are the ultimate policymakers at the World Bank. Generally, the governors are member countries ' ministers of finance or ministers of development. They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund. The governors delegate specific duties to 25 Executive Directors , who work on-site at the Bank. The five largest shareholders, France, Germany, Japan, the United Kingdom and the United States appoint an executive director, while other member countries are represented by 20 elected executive directors.

11. Organization The World Bank Group president chairs meetings of the Boards of Directors and is responsible for overall management of the Bank. The President is selected by the Board of Executive Directors for a five-year, renewable term. David Malpass is the 14th president of the Bank. He is chairman of the Bank's Board of Executive Directors and is also president of the five interrelated organizations that make up the World Bank Group.

12. Reference INTERNATIONAL BUSINESS – LAWS AND PRACTICES. 3 rd Chapter, The Institute of Company Secretaries of India