International Bank for Reconstruction and
• The International Bank for Reconstruction
and Development (IBRD) is an international
financial institution which offers loans to
middle-income developing countries.
• The IBRD is the first of five member institutions which compose the World
Bank Group and is its headquarter is in Washington, D.C., United States. • It was established in 1944 with the mission of financing the reconstruction of
European nations devastated by World War II.
• Together, the International Bank for Reconstruction and Development and its
concessional lending arm, the International Development Association, are collectively known as the World Bank as they share the same leadership and staff.
• The IBRD and IMF were established by delegates at the
Bretton Woods conference in 1944 and became
operational in 1946
• The IBRD was established with the original mission of
financing the reconstruction efforts of war-torn European
nations following World War II
• The Bank issued its inaugural loan of $250 to France in
1947 to finance infrastructure projects.
• The institution also established its first field offices in: • Paris, France.
• Copenhagen, Denmark.
• Prague, Czechoslovakia.
• All the way till 1950s, the Bank financed projects seeking
to dam rivers, generate electricity, and improve access to
water and sanitation.
• Following the reconstruction of Europe, the Bank's
mandate has transitioned to eradicating poverty around
• In 1960, the International Development Association (IDA) was established to serve as the Bank's concessional
lending arm and provide low and no-cost finance and
grants to the poorest of the developing countries as
measured by gross national income per capita.
FUNCTIONS OF IBRD
Granting reconstruction loans to war devastated countries.
Granting developmental loans to underdeveloped countries.
Providing loans to governments for agriculture, irrigation, power, transport, water supply, educations, health, etc.
Providing loans to private concerns for specified projects.
Promoting foreign investment by guaranteeing loans provided by other organizations.
Providing technical, economic and monetary advice to member countries for specific projects
Encouraging industrial development of underdeveloped countries by promoting eco nomic reforms.
CAPITAL RESOURCES OF IBRD:
• The initial authorized capital of the World Bank was
$10,000 million, which was divided in 100,000 shares of
$100,000 each. The authorized capital of the Bank has
been increased from time to time with the approval of
• On 30th June, 1996, the authorized capital of the Bank
was $188 billion out of which $180.6 billion (96% of total
authorized capital) was issued to member countries in the
form of shares.
Member countries repay the share amount
to the World Bank in the following ways:
• 2% of allotted share are repaid in gold, US dollar or
Special Drawing Rights (SDR).
• Every member country is free to repay 18% of its capital
share in its own currency.
• The remaining 80% share deposited by the member
country only on demand by the World Bank.
• The Bank's membership has increased from the initial number of
30 countries to 68 countries in 1960 and to 151 countries in 1988. • In 1960, the Bank approved loans worth $ 659 million which went
up to $ 14,762 million in 1988.
• In 1960, 31 operations were approved for financial assistance. In
1988, the number of operations approved increased to 118.
• Cumulatively, up to June 1988, the IBRD has provided loans worth
In 1988, the IBRD has granted loans worth
$155049 million. About 22% of the Banks
aggregate lending is for energy, 21% for
agriculture and rural development, 18% for...
Please join StudyMode to read the full document