ADB (Asian Development Bank)
Type: Non-governmental organization providing funding and technical assistance throughout the
The Asian Development Bank, a multilateral development finance institution, was founded in 1966
by 31 member governments to promote the social and economic progress of the Asian and Pacific
region. Over the past 31 years, the Bank's membership has grown to 57, of which 41 are from
within the region and 16 from outside the region.
The Bank gives special attention to the needs of the smaller or less-developed countries and priority
to regional, sub regional and national projects and programs.
The Asian Development Bank (ADB) is a regional development bank established on 22 August
1966 to facilitate economic development of countries in Asia. The bank admits the members of
the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP,
formerly known as the United Nations Economic Commission for Asia and the Far East) and nonregional developed countries. From 31 members at its establishment, ADB now has 67 members of which 48 are from within Asia and the Pacific and 19 outside. ADB was modelled closely on
the World Bank, and has a similar weighted voting system where votes are distributed in proportion
with member's capital subscriptions.
By the end of 2012, both the United States and Japan hold the two largest proportions of shares
each at 12.78%. China holds 5.45%, India holds 5.36%.
The highest policy-making body of the bank is the Board of Governors composed of one
representative from each member state. The Board of Governors, in turn, elect among themselves
the 12 members of the Board of Directors and their deputy. Eight of the 12 members come from
regional (Asia-Pacific) members while the others come from non-regional members.
The Board of Governors also elect the bank's President who is the chairperson of the Board of
Directors and manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and because Japan is one of the largest shareholders of the bank, the
president has always been Japanese.
The most recent president was Takehiko Nakao, who succeeded Haruhiko Kuroda in 2013.
The headquarters of the bank is at 6 ADB Avenue, Mandaluyong City, Metro Manila, Philippines,
and it has representative offices around the world. The bank employs 3,051 people, of which 1,463
(48%) are from the Philippines.
The ADB offers "hard" loans from ordinary capital resources (OCR) on commercial terms, and the
Asian Development Fund (ADF) affiliated with the ADB extends "soft" loans from special fund
resources with concessional conditions. For OCR, members subscribe capital, including paid-in and
callable elements, a 50 percent paid-in ratio for the initial subscription, 5 percent for the Third
General Capital Increase (GCI) in 1983 and 2 percent for the Fourth General Capital Increase in
1994. The ADB borrows from international capital markets with its capital as guarantee.
In 2009, ADB obtained member-contributions for its Fifth General Capital Increase of 200%, in
response to a call by G20 leaders to increase resources of multilateral development banks so as to
support growth in developing countries amid the global financial crisis. For 2010 and 2011, a 200%
GCI allows lending of $12.5-13.0 billion in 2010 and about $11.0 billion in 2011. With this
increase, the bank's capital base has tripled from $55 billion to $165 billion.
ADB performs the following functions:
(i) Promote investment in the region of public and private capital for development purposes.
(ii) Provide loans for the economic and social development of the member countries of the region.
(iii) Help member countries in coordinating their development policies and plans.
(iv) Provide technical assistance for the preparation, financing and execution of development
projects and programmes.
(v) Undertake such other activities and provide such other services as may advance its objectives.
(vi) Provide financial and technical assistance to member countries for environmental protection.
(vii) Act as financial intermediary by transferring resources from global capital markets to
(viii) Support public resource mobilisation and management to member countries.
ADB was set up with an authorised capital of US$ one billion which was later on raised to $21.6
billion. Japan, India, China, USA, Canada and Germany are the main subscribers.
ADB is administered by a Board of Directors which is elected by the Board of Governors. The
Board has 12 members of which 8 represent regional members and 4 represent non-regional
members elected for two years' term.
The Board of Directors normally meets once in a week and exercises all the powers. The president
is elected by the Board of Governors for a term of five years.
ADB has invested considerably in agriculture, agro industry, energy, transport, communication,
social infrastructure, etc. It provides equity finance and underwriting facilities.
It has provided an assistance of more than 50 billion dollars since its beginning. The Bank has
contributed significantly to economic development and living standards in Asia.
The ADB's operational strategy for India is to ensure higher sustainable economic growth so as to
reduce poverty and promote employment. The bank encourages private sector investment in India
through an improved incentive framework.
It seeks to improve policy, institutional and regulatory framework so as to improve the efficiency of
public sector undertakings. It provides support for resource mobilisation and management at the
state level. ADB has given much importance to rural development in India.