INTRODUCTION

• The World Bank  is an international financial institution that provides

loans to countries of the world for capital projects. It comprises two
institutions: the International Bank for Reconstruction and
Development (IBRD), and the International Development
Association (IDA). The World Bank is a component of the World Bank
Group.
• The World Bank's most recent stated goal is the reduction of poverty. As
of November 2018, the largest recipients of world bank loans were India
($859 million in 2018) and China ($370 million in 2018), through loans
from IBRD.
 HISTORY
The World Bank was created at the 1944 Bretton Woods
Conference along with the International Monetary
Fund (IMF). The president of the World Bank is,
traditionally, an American. The World Bank and the IMF
are both based in Washington, D.C., and work closely
with each other.
Although many countries were represented at the
Bretton Woods Conference, the United States and United
Kingdom were the most powerful in attendance and
dominated the negotiations. The intention behind the
founding of the World Bank was to provide temporary
John Maynard
loans to low-income countries which were unable to
Keynes (right) and Harry
obtain loans commercially. The Bank may also make
Dexter White, the
loans and demand policy reforms from recipients.
"founding fathers" of both
the World Bank and
the International Monetary
Fund (IMF).
The World Bank Group headquarters building in
Washington, D.C.

During the 2016 U.S. presidential election, Malpass

served as an economic advisor to Donald Trump, and
in 2017, he was nominated and confirmed as Under
Secretary of the Treasury for International Affairs at
the Treasury Department. Malpass was
elected President of the World Bank on April 4, 2019,
having been nominated to the position in February
2019 by the Trump Administration.He formally took
office on April 9, 2019.
 OBJECTIVES
• To provide long-run capital to member countries for economic
reconstruction and development. To induce long-run capital investment
for assuring Balance of Payments (BoP) equilibrium and balanced
development of international trade.
• To provide guarantee for loans granted to small and large units and other
projects of member countries.
• To ensure the implementation of development projects so as to bring
about a smooth transference from a war-time to peace economy.
• To promote capital investment in member countries by the following
ways;
(a) To provide guarantee on private loans or capital investment.
(b) If private capital is not available even after providing guarantee, then
IBRD provides loans for productive activities on considerate conditions.
 FUNCTIONS
• World Bank provides various technical services to the member countries. For
this purpose, the Bank has established “The Economic Development
Institute” and a Staff College in Washington.
• Bank can grant loans to a member country up to 20% of its share in the
paid-up capital.
• The quantities of loans, interest rate and terms and conditions are
determined by the Bank itself.
• Generally, Bank grants loans for a particular project duly submitted to the
Bank by the member country.
• The debtor nation has to repay either in reserve currencies or in the
currency in which the loan was sanctioned.
• 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 counties where this amount will be collected.
 INTRODUCTION
• The International Monetary Fund (IMF) is an international organization headquartered
in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation,
secure financial stability, facilitate international trade, promote high employment and sustainable
economic growth, and reduce poverty around the world. Formed in 1944 at the Bretton Woods
Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into
formal existence in 1945 with 29 member countries and the goal of reconstructing the international
payment system. It now plays a central role in the management of balance of payments difficulties
and international financial crises.  Countries contribute funds to a pool through a quota system from
which countries experiencing balance of payments problems can borrow money. As of 2016, the
fund had SDR477 billion (about $667 billion).
• Through the fund and other activities such as the gathering of statistics and analysis, surveillance of
its members' economies, and the demand for particular policies, the IMF works to improve the
economies of its member countries. The organisation's objectives stated in the Articles of
Agreement are: to promote international monetary co-operation, international trade, high
employment, exchange-rate stability, sustainable economic growth, and making resources available
to member countries in financial difficulty.  IMF funds come from two major sources: quotas
and loans. Quotas, which are pooled funds of member nations, generate most IMF funds. The size of
a member's quota depends on its economic and financial importance in the world. Nations with
larger economic importance have larger quotas. The quotas are increased periodically as a means of
boosting the IMF's resources.
 HISTORY
• The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in
1944. During the Great Depression, countries sharply raised barriers to trade in an attempt to improve
their failing economies. This led to the devaluation of national currencies and a decline in world trade.
This breakdown in international monetary co-operation created a need for oversight. The
representatives of 45 governments met at the Bretton Woods Conference in the Mount
Washington Hotel in Bretton Woods, New Hampshire, in the United States, to discuss a framework
for postwar international economic co-operation and how to rebuild Europe.
• There were two views on the role the IMF should assume as a global economic institution.
American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making
sure that borrowing states could repay their debts on time. Most of White's plan was incorporated
into the final acts adopted at Bretton Woods. British economist John Maynard Keynes imagined
that the IMF would be a cooperative fund upon which member states could draw to maintain
economic activity and employment through periodic crises. This view suggested an IMF that
helped governments and to act as the United States government had during the New Deal in
response to World War II.
• he IMF formally came into existence on 27 December 1945, when the first 29 countries ratified its
Articles of Agreement. By the end of 1946 the IMF had grown to 39 members. On 1 March 1947,
the IMF began its financial operations, and on 8 May France became the first country to borrow
from it
IMF "Headquarters 1" in Washington, D.C.

The current Managing Director (MD) and

Chairwoman of the International Monetary
Fund is French lawyer and former
politician, Christine Lagarde, who has held the
post since 5 July 2011.
 OBJECTIVES
• To promote international monetary cooperation through a permanent institution which
provides the machinery for consolation and collaboration on international monetary
problems To facilitate the expansion and balanced growth of international trade, and to
contribute thereby to the promotion and maintenance of high levels of employment and real
income and to the development of the productive resources of all members as primary
objective of economic policy.
• To promote exchange stability, to maintain orderly exchange arrangements among
members, and to avoid competitive exchange depreciation.
• To assist in the establishment of a multila­teral system of payments in respect of current
transactions between members and in the elimination of foreign exchange restrictions which
hamper the growth of world trade.
• To give confidence to members by making the general resources of the Fund tempo­rarily
available to them under adequate safeguards, thus providing them with the opportunity to
correct maladjustments in their balance of payments, without resor­ting to measures
destructive of national or international prosperity.
• In accordance with the above, to shorten the duration and lessen the degree of dis­
equilibrium in the international balance of payments of members.
 FUNCTIONS
• Regulatory Function:
The Fund functions as the guardian of a code of rules set by its (AOA—
Articles of Agreement).
• Financial Function:
It functions as an agency of providing resources to meet short term and
medium term BOP disequilibrium faced by the member countries.
• Consultative Function:
It functions as a centre for international cooperation and a source of counsel
and technical assistance to its members.
The main function of the IMF is to provide temporary financial support to its
members so that ‘fundamental’ BOP disequilibrium can be corrected. However,
such granting of credit is subject to strict conditionality. The conditionality is a
direct consequence of the IMF’s surveillance function over the exchange rate
policies or adjustment process of members.
The main conditionality clause is the intro­duction of structural reforms. Low
income countries drew attraction of the IMF in the early years of 1980s when many
of them faced terrible BOP difficulties and severe debt repayment prob­lems.
Against this backdrop, the Fund took up ‘stabilisation programme’ as well as
‘structural adjustment programme’. Stabilisation programme is a demand
management issue, while structural programme concentrates on supply
management. The IMF insists member countries to implement these programmes
to tackle macroeconomic instability.

Its main elements are:

(i) Application of the principles of market economy;
(ii) Opening up of the economy by removing all barriers of trade;
(iii) Prevention of deflation.
The Fund provides financial assistance. It includes credits and loans to member
countries with balance of payments problems to support policies of adjustment
and reform. It makes its financial resources available to member countries through
a variety of financial facilities.
In addition, technical assistance is also given by the Fund. Technical assistance
consists of expertise and support provided by the IMF to its members in several
broad areas : the design and implementation of fiscal and monetary policy;
institution-building, the handling and accounting of transactions with the IMF; the
collection and retirement of statistical data and training of officials.