IMF AND WORLD BANK

Submitted by
Hariharan B
1804305011
MBA (IT&LM)

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International Monetary Fund:
 The Bretton Woods Conference, 1944
 The Bretton Woods Conference, officially known as the United Nations
Monetary and Financial Conference, was a gathering of delegates from 44
nations that met from July 1 to 22, 1944 in Bretton Woods, New
Hampshire, to agree upon a series of new rules for the post-WWII
international monetary system. The two major accomplishments of the
conference were the creation of the International Monetary Fund (IMF)
and the International Bank for Reconstruction and Development (IBRD)
under (World Bank).
 Abbreviation-IMF
 Formation on 27 December 1945; 73 years ago
 Type: International financial institution.
 On 28 June 2011, Christine Lagarde was named managing director of
the IMF.
 Chief economist of IMF: Geetha Gopinath
 Current 189 member countries of IMF
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Purpose:
 To foster global monetary cooperation and secure financial
stability.
 Facilitate international trade, promote high employment and
sustainable economic growth.
 Reduce poverty around the world.
 The IMF's primary purpose is to ensure the stability of the
international monetary system—the system of exchange rates
and international payments that enables countries (and their
citizens) to transact with each other. 
 It monitor’s economic and financial development and policies
and provide policy to member countries with its experiences.
 It lends to member countries with BOP and for correcting
underlying problems like( education, pollution , employment)

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 Provides training and technical assistance to member countries of
respective governments and its central bank.

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ORGANIZATION & MANAGEMENT:
The Board of Governors is the highest decision-making body of
the IMF. It consists of one governor and one alternate governor
for each member country. The governor is appointed by the
member country and is usually the minister of finance or the head
of the central bank(Highest authority of governing the IMF)
the Board of Governors has delegated most of its powers to the
IMF's Executive Board, it retains the right to approve
quota increases, Special Drawing Allocations(SDR’s).
The Board of Governors also elects or appoints executive
directors.  Voting by the Board of Governors usually takes place
by mail-in ballot.
The Boards of Governors of the IMF and the World Bank Group
normally meet twice a year, during the  
IMF-World Bank Spring and Annual Meetings

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Ministerial Committees:
 The IMF Board of Governors is advised by two ministerial committees,
The International Monetary and Financial Committee  (IMFC) and
The Development Committee (DC)
 The IMFC has 24 members, drawn from the pool of 189 governors.
 Key policy issue relating to International Monetary System are
considered twice yearly in a committee of governors called as IMFC.
 The Development Committee is a joint committee, tasked with
advising the Boards of Governors of the IMF and the World Bank on
issues related to economic development in emerging and developing
countries.
 25 members in Development committee.
 The present chairperson is Sri Mulyani Indrawati , Minister of
Finance of Indonesia for (DC).

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The Executive Board
 The IMF’s 24-member Executive Board conducts the daily business of the
IMF and exercises the powers delegated to it by the Board of Governors.
 EB Collection includes: agendas and minutes of Board meetings; policy
papers; staff reports; reports on missions to member countries and
discussions of fiscal, monetary and economic policy issues.
RESOURCES FOR IMF (Quotas, NAB, Bilateral)
 The resources of the IMF come from Quotas subscription by members
and borrowings.
 A member country's quota determines its maximum financial commitment
to the IMF, its voting power, and has a bearing on its access
to IMF financing. When a country joins the IMF, it is assigned an
initial quota in the same range as the quotas of existing members of
broadly comparable economic size and characteristics.
 Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s
unit of account.

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 largest member of the IMF is the United States, with a current quota (as
of March 2017) of SDR82.99 billion (about US$118 billion), and the
smallest member is Tuvalu, with a quota of SDR2.5 million (about US$3.5
million).
 Special Drawing Rights (SDR):
The SDR is an international reserve asset, created by the IMF in 1969 to
supplement its member countries’ official reserves. So far SDR 204.2 billion
(equivalent to about US$291 billion) have been allocated to members,
including SDR 182.6 billion allocated in 2009 in the wake of the global
financial crisis.
 The value of the SDR is based on a basket of five currencies— The U.S.
Dollar, The Euro, The Chinese Renminbi, The Japanese Yen, and The
British pound sterling.
 1 SDR =96.19 Indian rupees.
 Member India 13,114.4 million SDR’s and total % is 2.76
 Governor: Arun Jaitley, Alternate governor: Shaktikanta Das.
 Member to pay quotas 25%-SDR or (5 Special currencies) 75%-own
currency
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 Multilateral Borrowings: Through the New Arrangements to
Borrow (NAB).(2nd line of defense)
 A number of member countries and institutions stand ready to lend
additional resources to the IMF. The NAB constitutes a second line of
defense to supplement IMF resources to forestall or cope with an
impairment of the international monetary system.
 Bilateral Borrowing (3rd line of defense) : IMF borrow the money
from the lending country for uncertainity in the global economy

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IMF LENDING:
 IMF lending money to the member country to restore economic stability
and growth.
 Types: 1.Concessional Lending 2.Non-Concessional Lending.
 1.Concessional lending: Low-income countries may borrow at a
concessional rate through the Poverty Reduction Growth facility(PRGF).
 1a.PRGF: IMF provided loans to the low income countries .
 Enhanced Structural Adjustment Facility (ESAF)
 In 1999, ESAF replaced by PRGF and it focuses on poverty reduction.
 Interest rate: 0.5%
 Repayment Period: 5*1/2-10 years.

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 2.Non Concessional lending: It is provided through 5 main facilities.
 2a. Stand-by Arrangement (SBA): This is for short term BOP problems.
 Repayment: 2*1/4-4 years.
 Surcharges applied to high level of access.
 2b.Extended Fund Facility (EFF): Established in 1974 to help countries
for protracted (extended) BOP problems to develop the structure of the
economy.
 Repayment 4*1/2-7 years.
 Surcharges applied to high level of access.
 2c.Supplemental Reserve Facility(SRF): Founded in 1997 to meet short
term financing on a large scale.
 Repayment of loans: 1-1*1/2 years, but may request an extension up to 1
year and substantial surcharge of 3-5 %.
 2d.Contingent Credit Lines(CCL): It help member from crisis, established
in 1999. To implement sound economic policies
 Same repayment condition as SRF but smaller surcharge of 1*1/2-3*1/2.

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 2e.Compensatory Financial Facility (CFF): Established in 1960s to
assist countries experiencing sudden short fall in export earnings or
increase in the cost of imports.
 Same financial terms as SBA, except that CFF loans carry NO
SURCHARGE.

Conditionality:
 When a country borrows from the IMF, its government agrees to adjust its
economic policies to overcome the problems that led it to seek financial
aid.
 IMF requires “letter of intend”-a document containing a declaration of
the intentions of the writer.

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FACTS AND FIGURES OF IMF:
 SDR Rates for 15/4/2019 -SDR Interest Rate = 1.141%  and 1 USD = SDR
0.719162
 The 2019 Annual Meetings of the Boards of Governors of the IMF and the
World Bank Group will be held in Washington, D.C
 April 12-14, 20192019 Spring Meetings of the World Bank Group and
the International Monetary Fund 
Washington, D.C.
 October 18-20, 20192019 Annual Meetings of the World Bank Group
and the International Monetary Fund 
Washington, D.C.
 While India has not been a frequent user of IMF resources, IMF credit
has been instrumental in helping India respond to emerging balance of
payments problems on 2 occasions. In 1981-82, India borrowed SDR 3.9
billion under an Extended Fund Facility, the largest arrangement in IMF
history at the time. In 1991-93, India borrowed a total of SDR 2.2 billion
under two stand by arrangements, and in 1991 it borrowed SDR 1.4 billion
under the Compensatory Financing Facility.
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 World Bank

 Motto: “Working for a World Free of Poverty”

 What World Bank is?-With 189 member countries, staff from more than
170 countries, and offices in over 130 locations, the World Bank Group is a
unique global partnership: five institutions working for sustainable
solutions that reduce poverty and build shared prosperity in developing
countries.
 the International Bank for Reconstruction and Development (IBRD), the
International Development Association (IDA), the International Finance
Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA)
and the International Centre for Settlement of Investment Disputes
(ICSID).
 Where World Bank works?-The World Bank Group works in more than
170 countries, working with partners in the public and private sectors in
their efforts to end poverty and tackle some of the most pressing
development challenges.

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 What world Bank do?-The World Bank Group works in every major area
of development.  They provide financial and technical assistance, and we
help countries share and apply innovative knowledge and solutions to the
challenges they face.
Principles of World Bank:
 Work in partnership.
 Quality result.
 innovation.
Purpose of World Bank:
 To assist in reconstruction.
 It encourages the development of less developed countries.
 To promote long balanced growth of international trade.
Orientation (AIM)
 Main focus helping poor people.
 focus on social development (education, infrastructure)
 Strengthening the ability of government to provide quick services.
 Protecting environment and promoting private business.
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Differences between IMF and World Bank:
1.function
IMF : Maintain economic stability
WB: Promote economic development.
2.Size
IMF: 2300 staffs
WB: 7000 staffs
3.Member Countries:
IMF:189
WB:189

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REFERENCES
 https://2001-2009.state.gov/r/pa/ho/time/wwii/98681.htm (US Department of State
Archive-Bretton Woods Conference1944)
 https://www.imf.org/external/np/sec/memdir/memdate.htm (list of Members)
 https://www.imf.org/external/am/index.htm (Annual Spring Meeting)
 https://www.imf.org/external/about/govstruct.htm (governance)
 https://www.imf.org/en/About/Factsheets/A-Guide-to-Committees-Groups-and-Clubs
(development committee)
 https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Rig
ht-SDR
(Special Drawing Right)
 https://www.imf.org/external/np/sec/memdir/members.aspx#I (Quotas and Votes list of
IMF members)
 https://www.imf.org/en/About/Factsheets/Where-the-IMF-Gets-Its-Money (Quotas,
multi and bilateral borrowing)
 https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/28/IMF-Conditionality
(Conditionality)
 https://www.imf.org/external/am/index.htm (Meeting date)
 https://www.imf.org/external/country/ind/rr/glance.htm (Financial Assistance of INDIA)

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 http://www.worldbank.org/en/work-with-us (World Bank)
 Reference Book
1. FRANCIS CHERUNILAM (2016) International Business Text
and Cases. Fifth Edition, PHI learning limited, delhi.

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THANK YOU….

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