IMF And World Bank.

International Monitary Fund is an important agency of united nations organisation. It deals with the
financial matters. Hence it is the international financial institution.

Origin:-- International Monitary fund was established in the month of december in 1945 at
Washington DC. It was formed for promoting international monetary cooperation, trade and exchange
rate stability, and to give financial assistance to the states in need.

All the UN members automatically become members of IMF. As such, its present membership is 188. Each
country is a shareholder and shares its contribution in 25% gold and the balance in currencies.
IMF is governed by the objective of promoting monetary cooperation, problem solving,
financial security, facilitating international trade, increasing employment, ensuring sustainable growth,
reduction of poverty, end of foreign exchange restrictions ETC.

Objectives Of IMF:

IMF is established with certain aims and objectives. Some of them are discussed here.

1. To ensure Financial co-operation.

2. To ensure stability in foreign exchangerate.

3. To encourage free flow of international trade.

4. To promote International trade.

5. To reduce the degree of disequilibrium of international balance of payments.

6. To develop confidence among it's member nations.

7. To promote investment of capital inbackward and underdevelopped countries.

8. To establish multilateral trade and payment system.

Membership:--

IMF is composed of a board of governors, managing directors and the executive board.
1. The Board of Governors: It is the highest authority and comprises representatives of all member countries. It meets
once in a year.
2. Executive Board: It has 22 Executive Directors headed by a Managing Director. He also acts as the chief of
staff. There are about 1700 international civil servants.

Functions:---

IMF has been assigned several functions :

A. To act as a watch dog of international economic relations.
B. To monitor the policies and activities of major economic powers and trading nations as these
are always the determinants of international economic relations.
 C. To monitor budgetary deficits and fiscal deficits of states as these together indicate the
health/weakness of their economies.
D. To grant loans to nations.
E. To sell foreign exchange to nations.
F. To monitor currency valuation and devaluation.
G. To check the breakdown of economies.
H. To ensure that nations must spend at least one half of their gains.

On the whole, the IMF operates for monitoring international economy, for helping the nations in
preventing and overcoming economic crises and for making available loans and credits for helping the
nations to meet their needs. It creates revolving funds and gains. It acts as an international economic
institution for guiding and assisting the nations in respect of their monetary needs, assets and liabilities.
It provides guidelines to the nations for helping them both for overcoming their financial problems as
well as for strengthening their financial healths.

However in this era of globalisation, IMF is working as the balancing body in the financial area. Even
then it has its own defects.some of them are:

A. Pro-capitalists.

B. restricts developping nations.

C. Acts as an agent of neocolonialism.

After the introduction of globalisation and other liberalising policies it has undergone and
simultaneously brought some majorchanges. To improve the condition the critiques suggests:

1. End of US domination.

2. Restructuring of voting rights/powers in the IMF.

3. more role for emerging economies like India and China,
4.. reduced role for the developed European countries, and

International Bank Of Reconstruction And Development[IBRD]:--

IBRD is also known as the world bank. Unlike IMF, It provides long term lones.

It has come into existence in December, 1945. It was accorded the status of UN Special agency in November 1947. The
purpose of this agency is to assist in the reconstruction of capital for productive purpose. It lends money for
agriculture, rural development, energy, education, health, family planning, Roads and Railways,
telecommunications, power facilities etc. It keeps in mind the prospects for repayment. The bank’s decision to lend
is based on economic considerations. It cannot restrict the use of loans to purchases.
It consists of Board of Governors, Executive Directors and President.
• The Board of Governors: The real power rests with the Board of Governors. It meets once in a year. It appoints
22 Executive Directors. The chairman is elected by the Board of Directors every year. He is Exofficio chairman of
five Executive Directors.
• Executive Directors: It consists of five Executive Directors who are appointed by the five largest stockholders
and remaining 17 Executive Directors are elected by the Governors of remaining members.
• The President: He is the chief executive officer of the IBRD. He is chosen by the Governors and is assisted by
other staff.

Functions
• It tries to raise the level of productivity. It provides necessary loans to various countries for their development. It
charges very moderate rate of interest. After the money is made available to the country the bank ensures that the
money is being used as per the terms of contract. Bank acts as vender as well as guarantor.
• It avoids social project loans for building hospitals and schools and slum clearance. It provides loans to
encourage economic growth.
In addition to this, IBRD has some organs like 1. International financial corporation [IFC] and 2.
International development Agency [IDA].

On the whole both the financial institutions of UNO namely IMF and IBRD are helpful in stabilizing the
world financial market.