WORLD BANK GROUP

The term ‘World Bank’ generally refers to IBRD and IDA as they have the same head
and management, while the term “World Bank Group’ refers to a group of five
institutions, namely:-
1. International Bank for Reconstruction and development (IBRD)
2. International Development Association(IDA)
3. International Finance Corporation(IFC)
4. Multilateral Investment Guarantee Agency (MIGA)
5. International Centre for Settlement of Investment disputes (ICSID)

Among them, IBRD first came into existence. To be a member of World Bank, a
country needs to be a member of IMF first. India is a member of four of them (except
ICSID). Headquarter of World Bank is located at Washington DC (United States).
The present President of the World Bank - Ajay Banga. Banga began his five-year
term on June 2, 2023. He belongs to India. World Bank has two goals for the world
to achieve by 2030.They are:-
1. End extreme poverty by decreasing percentage of people living on less than
$1.90 a day to no more than 3 per cent.
2. Promote shared prosperity by fostering the income growth of the bottom 40
per cent of every country.

The fourteenth and current World Bank Group president is Ajay Banga, who was
selected on May 3 and began his term on June 2, 2023.

Ajay Banga
Current
President of
WBG

Ajay Banga is the current president of the World Bank Group:

 Term
Banga began his five-year term on June 2, 2023.
 Previous roles
Banga was the President and CEO of Mastercard, and the Vice Chairman at
General Atlantic.
 Responsibilities
 As president, Banga chairs the boards of directors and manages the World
Bank Group.
 Vision
Banga's vision for the World Bank Group is to create a world free of poverty
on a liveable planet.

Ajaypal Singh "Ajay" Banga is an Indian-born American business executive.

He is currently the president of the World Bank Group. He was the executive
chairman of Mastercard, after having previously served as president and
chief executive officer of the company from July 2010 until December 31,
2020.

जानकारी

अजयपाल सिंह बंगा विश्व बैंक के वर्तमान अध्यक्ष और मुख्य

कार्यकारी अधिकारी हैं। 19 अक्टूबर 2014 को प्रतिष्ठित मैगजीन
हार्वर्ड बिज़नेस रिव्यू द्वारा जारी वर्ष 2014 में विश्व के 100
सर्वश्रेष्ठ निष्पादन वाले मुख्य कार्यकारी अधिकारियों की सूची
में उन्हें भी शामिल किया। वे इस सूची में 64वें स्थान पर है।

David R. Malpass was the 13th President of the World Bank Group

David R. Malpass
Former President, World Bank Group

13th President of the World Bank Group, April 9, 2019 – June 1, 2023
David R. Malpass was the 13th President of the World Bank Group.
 Name Established in Headquarters Members Is India a
Member?
IBRD 1945 Washington DC 189 Yes
IDA 1960 Washington DC 174 Yes
IFC 1956 Washington DC 185 Yes
MIGA 1988 Washington DC 182 Yes
ICSID 1966 Washington DC 156 No

International Bank for Reconstruction and Development (IBRD):

It is the original World Bank Institution (i.e., first to be established among group of five).
IBRD was established on 27 December 1945 as per decision in Bretton Woods Conference of
1944. IBRD started its operations from 25 June 1946. The initial objective of establishing
IBRD was to assist the Second world War ravaged countries in their reconstruction. Later,
economic development of developing and poor nations became the goal. India is the founding
member of IBRD Currently IBRD has 189 members and Headquarter is Washington DC).

Functions of IBRD:
1. It lends money to Government of middle income countries and creditworthy LICs.
2. It provides long-term loans in large volumes, with longer maturity and low rate of
interest.
3. It promotes key policy and institutional reforms such as safety net or anti-corruption
reforms.
4. It helps preserve borrowers’ financial strength (by supporting them during their
financial crisis).

Presently, the World Bank is playing a major role of providing loans for development works
to member countries, especially to underdeveloped countries. The World Bank provides long-
term loans for various development projects of 5 to 20 years duration. The loaning system of
the Bank can be explained with the help of the following points:-
1. Bank can grant loans to a member country up to 20% of its share in the paid-up
capital.
2. Bank also provides loan to private investors belonging to member countries on its
own guarantee, but for this loan private investors have to seek prior permission from
those countries where this amount will be collected. For such loans, the consent of
that country is also required in whose currency the loan is being provided. For
granting such guarantee, the bank charges 1% to 2% as service charge.
3. The quantum of loans, interest rate and terms and conditions are determined by the
bank itself.
4. Generally, the Bank grants loan for a particular project duly submitted to the bank by
the member country.
5. The debtor nation has to repay either in reserve currencies or in the currency in which
the loan was sanctioned.

Besides, granting loans for reconstruction and development, the World Bank also
provides own development programsestablished ‘The Economic Development Institute’
and a Staff College in Washington.

Types of Financing:-
(1). Investment Project Financing, (2). Development Policy Financing, (3). Program-for
 -Result, (4). Private Sector Options
Investment Project Financing provides financing to governments for activities that create
the physical/ social infrastructure necessary to reduce poverty and create sustainable
development.
Development Policy Financing provides budget support to governments or a political
subdivision for a program of policy and institutional actions to help achieve sustainable,
shared growth and poverty reduction.
Program-for -Result links disbursement of World Bank funds directly to the delivery of
defined results, helping countries improve the design and implementation of their own
development programs and achieve lasting results by strengthening institutions, enhancing
systems, and building capacity.
Private Sector Options for financing, direct investment and guarantees are provided by
MIGA and IFC. Guarantees can also be provided through World Bank (IBRD/IDA) for
private sector projects.

Capital Resources of World Bank:

The initial authorized capital of the World Bank was $10,000 million, which was divided in 1
lakh shares of $ 1 lakh each. The authorized capital of the Bank has been increased from time
to time with the approval of member countries. At preent authorized capital of the World
Bank is $280 billion. Member countries repay the share amount to the world Bank in the
following ways:-

1. 2% of allotted share are repaid in gold, US dollar or SDR.

2. Every member country is free to repay 18% of its capital share in its own currency.
3. The remaining 80% share is deposited by the member country only on demand by the
World Bank.
The headquarters of World Bank is Washington DC. IDA established on September 24, 1960
and IFC established in July 1956 are the two main associate institutions of IBRD. These
institutions work under the supervision of World Bank. MIGA is also an associate institution
in the World Bank group.

Relation of IBRD with India:

1. The shareholding of India in IBRD is 3.of $1 lakh each.15 per cent (the seventh
largest shareholder).
2. India has a voting right of 2.91 percent.
3. It supports India with an integrated package of financing, advisory, services and
knowledge.