The document provides information on international financial institutions (IFIs) and the World Bank in particular. It defines IFIs as financial institutions established by more than one country. It notes the World Bank was established after WWII to assist in European reconstruction and provide mechanisms for global financial cooperation. The summary describes the World Bank as comprising the IBRD and IDA, which provide loans to countries for capital projects and development with the goal of reducing poverty.

1. Financial Institutions in International Trade
Prepared by:
Mr. Mohammed Jasir PV
Asst. Professor
MIIMS, Puthanangadi
Contact No: 9605 69 32 66

2. International Financial Institution
• An international financial institution (IFI) is a financial institution that has been
established (or chartered) by more than one country, and hence is subject
to international law.
• Its owners or shareholders are generally national governments, although
other international institutions and other organizations occasionally figure as
shareholders.
• The most prominent IFIs are creations of multiple nations, although some bilateral
financial institutions (created by two countries) exist and are technically IFIs.
• The best known IFIs were established after World War II to assist in the reconstruction of
Europe and provide mechanisms for international cooperation in managing the global
financial system.

3. Major International Financial Institutions
1. IBRD + IDA = WORLD BANK
2. IMF
3. Regional Development Bank
1. Asian Development Bank
2. African Development Bank
3. Inter-American Development Bank
4. European Bank for Reconstruction and Development

4. World Bank
• The World Bank is a component of the World Bank Group
• It is an international financial institution that provides loans to countries of
the world for capital projects
• It comprises two institutions
– International Bank for Reconstruction and Development (IBRD)
– International Development Association (IDA)

5. • July 1944 (Bretton woods’s)
• International financial institution
• To provide loans to reconstruction and develop countries
• Mainly for undeveloped and developing countries
• Motto “Working for a free of poverty”
• Together, IBRD and IDA make up the world bank
• Loans helped rebuild countries devastated by world war II
• Emphasis on infrastructure such as dams, electrical grids, irrigation systems,
and roads
World Bank

6. • 189 member countries
• 7000 Staff from more than 180 countries
• Offices in over 130 locations
• World Bank Group is a unique global partnership
• Five institutions working for sustainable solutions that reduce poverty
and build shared prosperity in developing countries.
World Bank

7. • First loan - France
• 1954 – Governing boards
• Today the bank group’s work touches nearly every sector that is important to
– Fighting poverty
– Supporting economic growth
– Ensuring sustainable gains in the quality of people’s lives in developing
countries
World Bank

8. David Malpass
2019 - Present
Eugene Meyer
1946–1946
Jim Yong Kim
2012–2019
Kristalina Georgieva
2019

9. Mission
• To end extreme poverty
– By reducing the share of the global population that lives in extreme
poverty to 3 % by 2030
• To promote shared prosperity
– By increasing the incomes of the poorest 40 % of people in every country

10. • World Bank made four loans totalling $497 million in 1947
• As of November 2018, the largest recipients of world bank loans were
– India ($859 million in 2018)
– China ($370 million in 2018), through loans from IBRD
Some Developmental Moves

11. 184 countries 181 countries189 countries 173 countries 161 member

12. • IBRD - The International Bank for Reconstruction and Development
• IDA - The International Development Association
• IFC - The International Finance Corporation
• MIGA - The Multilateral Investment Guarantee Agency
• ICSI Dispute - The International Centre for Settlement of Investment Disputes

13. • The International Development Association
– The International Development Association (IDA) provides interest-free loans
— called credits — and grants to governments of the poorest countries.
– Together, IBRD and IDA make up the World Bank.
• The International Finance Corporation
– The International Finance Corporation (IFC) is the largest global development
institution focused exclusively on the private sector
– Helping developing countries achieve sustainable growth by financing
investment, mobilizing capital in international financial markets, and providing
advisory services to businesses and governments.

14. • The Multilateral Investment Guarantee Agency
– Created in 1988
– To promote FDI into developing countries to support economic growth,
reduce poverty, and improve people’s lives.
– MIGA fulfils this mandate by offering political risk insurance
(guarantees) to investors and lenders
• The International Centre for Settlement of Investment Disputes
– It provides international facilities for conciliation and arbitration of
investment disputes

15. Objectives of WB
• Reconstruction and Development
• Encouragement to Capital Investment
• Encouragement to International Trade
• Establishment of Peace Time Economy
• Environmental Protection
• Maintenance of equilibrium in balance of payment

16. 1. Reconstruction and Development
The main objective of the bank is to reconstruct the war devastated economies
like Britain, France, Holland etc. and to provide economic assistance to
underdeveloped countries like India, Pakistan, Sri Lanka, Burma etc.
2. Encouragement to Capital Investment
An other important objective of the Bank is to encourage private investors to
invest capital underdeveloped countries, by means of guarantee of
participation in loans and other investment made by private investors and
when private capital is not available on reasonable terms, to supplement
private investment by providing on suitable conditions finance for productive
purposes out of its own capital, funds raised by it and its other resources.
Objectives of the World Bank

17. Contd..
3. Encouragement to International Trade
The third objective of the bank is to encourage international trade. It aims at
promoting long-range growth of international trade and maintenance of
equilibrium in member’s international balance of payments, so that
standard of living of the people of member-countries is raised
4. Establishment of Peace Time Economy
The fourth objective of the Bank is to help the member-countries changeover
from war-time economy to peace-time economy

18. Contd…
5. Environmental Protection
Global environmental protection is also an objective of Bank. To this end,
World Bank gives substantial financial assistance to those underdeveloped
countries which are engaged in the task of environmental protection
6. Maintenance of equilibrium in balance of payment
To promote long term balanced growth of international trade and the
maintenance of equilibrium in balance of payments of member countries
by encouraging long term international investment so as to develop
productive resources of members and thereby raising its productivity, the
standard of living and labour conditions.

19. Other Objectives
• Long-run capital to member countries (R&D)
• Long-run capital investment related to bop equilibrium and balanced
development of international trade
• Provide guarantee for loans granted to small and large units and other projects
of member countries
• Ensure the implementation of development projects to bring smooth
transference from a war-time to peace economy
• Promote capital investment in member countries
– Guarantee (private loans or capital investment)
– Provides loans for productive activities on considerate conditions. (If no
loan after guarantee)

20. Other Objectives Contd.
• Eliminate extreme poverty
• Universal poverty reduction
• Promote gender equality
• Reduce child mortality
• Improve maternal health
• Reduce HIV, Malaria and other diseases
• Develop a global partnership for development

21. World Bank is playing main role of providing loans for development
works to member countries, especially to underdeveloped countries.
The World Bank provides long-term loans for various development
projects of 5 to 20 years duration.

22. WB - Functions
• It provides various technical services to the member countries
• WB can grant loans to a member country
• The quantities of loans, interest rate and terms and conditions are fixed
by the Bank itself
• Bank grants loans for a particular project duly submitted to the Bank by
the member country
• The debtor nation has to repay – 1,Currency issued 2, forex reserve
• Provides loan to private investors belonging to member countries

23. 1. 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.
2. Bank can grant loans to a member country up to 20% of its share in the
paid-up capital.
3. The quantities of loans, interest rate and terms and conditions are
determined by the Bank itself.
4. Generally, Bank grants loans for a particular project duly submitted to
the Bank by the member country.
Functions of World Bank

24. Contd..
5. The debtor nation has to repay either in reserve currencies or in the
currency in which the loan was sanctioned.
6. 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.

25. Thank You