The World Bank & Other International Financial Institution

International Financial Organisation and World Bank

We have discussed in detail about the RBI and its relation with other important financial institution in India. Today we are going to discuss the world bank, IMF and some other International Financial Institution.

What is International Financial Institution?

An International Financial Institution (IFI) is a financial institution that has been established ( or chartered) by more than one country, and hence are subjects of international law. The best known IFIs were established after World War II to assist in the reconstruction of Europe and provide mechanisms for international cooperation in managing the global financial system.

World Bank’s Group

World Bank Structure

  • IBRD – International bank reconstruction and development
    (Provides loan to an average developing country)
  • IDA– International Development Agency
    (Provides loan to a poor developing country)
  • MIGA-Multilateral Investment Guarantee Agency
    (Ensures investment and credit investment)
  • IFC– International Financial Corporation
    (Promotes investment in Private sector)
  • ICSID– International Committee for Settlement of Investment Dispute
    (Promotes and settles the matter of investor between two countries)
  • From the above hierarchy table, it is clear that the World Bank is not a single bank but it is the part of the World Bank’s Group

World Bank

  • World bank consists of 2 bank
    1 ) IBRD
    2) IDA
  • HQ – Washington DC, USA
  • President – David Malpass
  • CEO: Kristalina Georgieva
  • The World Bank’s stated official goal is the reduction of poverty.
  • The World Bank was created at the 1944 Bretton Woods Conference, Established on July 1945
  • The Republic of Nauru, a tiny South Pacific island nation in the Pacific Ocean became the 189th member of the International Monetary Fund (IMF) and World Bank


  • IMF – International Monetary fund
  • Works on – Global monetary cooperation, secure financial stability, Facilitate international trade, Promote high employment and Sustained economic growth, and reduce poverty around the world.
  • Also formed at Bretton Woods Conference 1944
  • MD – Christine Lagarde
  • HQ- Washington DC, USA


  • Asian Development Bank
  • Promote social and economic development in Asia
  • HQ- Mandaluyong, Metro Manila, Philippines
  • President – Takehiko Nakao
  • Japan and the United States hold the largest proportion of shares at 15.607%.
  • China holds 6.444%, India holds 6.331%, and Australia holds 5.786%


  • Asian Infrastructure Investment Bank (AIIB)
  • Multilateral development bank
  • Supports to build infrastructure in the Asia-Pacific region
  • President – Jin Liqun
  • HQ- Beijing, China
  • China – largest shareholder (at 30.34 percent), followed by India (8.52 percent) and Russia (6.66 percent)

European Investment Bank

  • European Union’s non-profit long-term lending institution
  • Established in 1958 under the Treaty of Rome
  • Shareholders are the EU member states
  • HQ – Luxembourg
  • President – Werner Hoyer
  • World’s largest international public lending institution

Islamic Development Bank

  • The multilateral development financing institution
  • HQ – Jeddah, Saudi Arabia.
  • It was founded in 1973
  • There are 56 shareholding member states.
  • The Bank has received credit ratings of AAA from Standard & Poor’s, Moody’s, and Fitch.
  • President- Bandar Al Hajjar
  • Shareholding –
    1) Saudi Arabia (26.57%)
    2) Libya (10.66%)
    3) Iran (9.32%)


  • The International Fund for Agricultural Development (IFAD)
  • International financial institution and a specialized agency of the United
  • For eradicating poverty and hunger in rural areas of developing countries.
  • It was established as an international financial institution in 1977 as one of
    the major outcomes of the 1974 World Food Conference.
  • President – Gilbert Houngbo
  • HQ – Rome, Italy

New Development Bank

  • Multilateral development bank
  • Established by BRICS states (Brazil, Russia, India, China and South Africa)
  • Bank Supports public or private projects through loans, guarantees, equity
    participation and other financial instruments
  • The idea for setting up the bank was proposed by India at the 4th BRICS
    the summit in 2012 held in Delhi
  • President – K.V. Kamath
  • HQ – Shangai, China


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