Sunday, November 15, 2015

'World Bank' & 'World Bank Group' (For IBPS)

The world bank is an international financial institution that grants loans to developing nations for their capital programs. The world bank has a goal of reducing poverty.

World Bank has two institutions:

  1. International Bank for Reconstruction and Development (IBRD)
  2. International Development Association (IDA)


World bank should not be confused with 'World Bank Group', which is a group of five institutions (two institutions of world bank and three new)

  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)
The World Bank was founded at the 1944 Bretton Woods Conference, along with three other institutions, including the International Monetary Fund (IMF). The first country to receive a World Bank loan was France.  World Bank and IMF both headquartered at Washington DC. Jim Yong Kim
is the current president of World Bank.

The IBRD has 188 member countries while the IDA has 172 members. Each member state of IBRD should be also a member of the IMF. Only the members of IBRD are allowed to join other institutions within the Bank (such as IDA).


International Bank for Reconstruction and Development (IBRD)

IBRD is one of five institutions that comprise the World Bank Group. The IBRD is an international organization whose original mission was to enhance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight poverty by means of financing states. Its operations maintained through payments as regulated by member states. 
The IBRD provides loans to governments and public enterprises, always with a government (or
"sovereign") guarantee of repayment subject to general conditions. The funds for this lending come primarily from the issuing of World Bank bonds on the global capital markets typically $12-15 billion per year. 

International Development Association (IDA)

The international Development Association (IDA), is the part of the World Bank that helps the world's poorest countries. While IBRD serves middle-income countries with capital investment and advisory services, IBA is responsible for providing long-term, interest-free loans to the world's 80 poorest countries, 39 of which are in Africa.
IDA was created on September 24, 1960.  IDA provides grants and credits (subject to general conditions), with repayment periods of 35 to 40 years. 

International Finance Corporation (IFC)

The International Finance Corporation (IFC) promotes sustainable private sector investment in developing countries.  IFC is a member of the World Bank Group and is headquartered in Washington, DC. Its primary objective is 'to improve the quality of the lives of people in its developing member countries. 

IFC was Established in 1956, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world.

Multilateral Investment Guarantee Agency  (MIGA)

The Multilateral Investment Guarantee Agency (MIGA) is a member organization of the World Bank Group that offers political risk insurance. It was established to promote foreign direct investment into developing countries. MIGA was founded in 1988 with a capital base of $1 billion and is headquartered in Washington, DC. 175 member countries comprise 
MIGA's shareholders.

International Centre for Settlement of Investment Disputes (ICSID)

ICSID, an institution of the World Bank Group based in Washington DC, was established in 1966 pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention or Washington Convention). 158 countries signed the ICSID Convention as of 2012. 

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