World Bank.

WORLD
BANK
PRESENTED BY:
DAPINDER SINGH (17-MBA-19)

KASHISH GUPTA (25-MBA-19)
FACT FILE
 MOTTO Working for a World Free of Poverty

 FORMATION July 1944; 76 years ago
 TYPE Monetary International Financial
Organization
 HEADQUARTERS Washington, D.C., U.S.
 MEMBERSHIP 189 countries (IBRD)
173 countries (IDA)
 KEY PEOPLE •David Malpass (President)
•Anshula Kant (MD and CFO)
•Carmen Reinhart (Chief
Economist)
 PARENT ORGANIZATION World Bank Group
WHAT IS WORLD BANK?
 An international organization dedicated to
providing financing, advice and research to
developing nations to aid their economic
advancement.
 The bank predominantly acts as an

organization that attempts to fight poverty
by offering developmental assistance to
middle- and low-income countries.
 It also provides technical assistance and

policy advice and supervises—on behalf of
international creditors—the implementation
of free-market reforms.
SPECIAL FEATURES OF WORLD
BANK
WHY IT CAME INTO EXISTENCE?
 The World Bank was created at the end of the World War II at the 1944 Bretton Woods
Conference as a result of many European and Asian countries needing financing to
fund reconstruction efforts.
 Harry Dexter White and John Maynard Keynes also known as Founding father of
World Bank conceptualized an international institution to stabilize exchange rates and
provide a source of financing for reconstruction and development among countries
ravaged by the war.
 Since inception in 1944, the World Bank has expanded from a single institution to a
closely associated group of five development institutions.
BRETTON WOODS CONFERENCE
• The Bretton Woods Conference formally known as the United Nations
Monetary and Financial Conference was held from the 1st to 22nd of
July, 1944.
• It consisted 730 delegates from all 44 Allied nations at the Mount
Washington Hotel, situated in Bretton Woods, New Hampshire, United
States.
• The purpose of the Bretton Woods meeting was to set up a new system
of rules, regulations, and procedures for the major economies of the
world to ensure their economic stability and to regulate the
international monetary and financial order after the conclusion of
World War II.
• It created two major institutions:

- WORLD BANK: long term loan for distressed economy and
member countries
- IMF (International Monetary Fund): grants short term loans to
develop the cyclical disturbance in economy.
WORLD BANK GROUP
WORLD BANK
Five institutions, One group
The World Bank Group consists of five organisations:
• IBRD lends to low- and middle-income countries;

• International Development Association (IDA) lends to low-income
countries;
In addition to IBRD and IDA, the other institutions are closely associated with the
World Bank are:-
• International Finance Corporation (IFC) lends to the private sector;

• Multilateral Investment Guarantee Agency (MIGA) encourages private
companies to invest in foreign countries; and
• International Centre for Settlement of Investment Disputes
(ICSID) helps private investors and foreign countries work out differences
when they don't agree.
All five of these institutes together make up the World Bank Group
OBJECTIVES
1. To provide long-run capital to member countries for economic
reconstruction and development.
2. To induce long-run capital investment for assuring Balance of Payments

(BoP) equilibrium and balanced development of international trade.
0
3. To provide guarantee for loans granted to small and large units and other
projects of member countries.
4. To ensure the implementation of development projects so as to bring

about a smooth transference from a war-time to peace economy.
5. 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.
AREA OF OPEARTIONS
LOANS AND THE WORLD BANK
• The Bank lends money to middle-income countries at interest rates
lower than the rates on loans from commercial banks.
• In addition, the Bank lends money at no interest to the poorest
developing countries, those that often cannot find other sources of
loans.
• The bank offers flexible loans with maturities as long as 30 years
and custom-tailored repayment schedule.
• Countries that borrow from the Bank also have a much longer
period to repay their loans than commercial banks allow and don't
have to start repaying for several years.
SOURCE OF MONEY
• The Bank borrows the money it lends.
• The Bank's financial reserves come from several sources:

- from funds raised in the financial markets
- from earnings on its investments
- from fees paid in by member countries
- from contributions made by members (particularly the wealthier
ones) and
- from borrowing countries themselves when they pay back their loans.
• The Bank lends only a portion of the money needed for a project.
BOARD OF DIRECTORS
 Board of Directors are 24
 They are elected for two years
 5 from US, Japan, Germany, France, and Britain (five largest
shareholder)
 19 Directors from rest of the nations
 The five largest shareholders appoint an executive director each, while
other member countries are represented by 19 Executive Directors.
 The President is elected by the Board of Governors for a five year ,
renewable term
HOW WORLD BANK RUN?
The Bank is run like a giant cooperative, where its members are shareholders
. The number of shares a country has is based roughly on the size of its
economy.
• Ultimate decision making authority: Their govt. represented by Board of

Governors. These Governors are country ministers, such as Ministers of
Finance or Ministers of Development. The governors are the ultimate
policymakers in the World Bank.
• Day-to-Day decision making: Governors meet only once in a year at the

Bank's Annual Meetings. Since the governors meet only once a year, they
give specific duties to their Executive Directors, who work on-site at the
Bank.
• Role of Executive Director: The Bank's 24 Executive Directors oversee

the Bank's business, including approving loans and guarantees, new
policies, the administrative budget, country assistance strategies, and
borrowing and financial decisions.
 India is a member of four of the five constituents of the World
Bank Group except ICSID.
THANK YOU

World Bank.

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WORLD

DAPINDER SINGH (17-MBA-19)

 MOTTO Working for a World Free of Poverty

 The bank predominantly acts as an

 It also provides technical assistance and

• It created two major institutions:

• IBRD lends to low- and middle-income countries;

• International Finance Corporation (IFC) lends to the private sector;

2. To induce long-run capital investment for assuring Balance of Payments

4. To ensure the implementation of development projects so as to bring

5. To promote capital investment in member countries by the following

• The Bank's financial reserves come from several sources:

• Ultimate decision making authority: Their govt. represented by Board of

• Day-to-Day decision making: Governors meet only once in a year at the

• Role of Executive Director: The Bank's 24 Executive Directors oversee

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