World Bank group

About World Bank

• The World Bank is an international financial institution that provides loans to countries of the world for capital projects.
• It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA).
  • IBRD offers assistance to middle income and poor but credit worthy countries.
  • IDA offers loans to the world's poorest countries. These loans come in the form of "credits," and are essentially interest-free (low interest).
• It is the largest and most well-known development bank in the world and is an observer at the United Nations Development Group

World Bank Group

• The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. The bank is based in Washington, D.C.
• The WBG came into formal existence on 27 December 1946 following international ratification of the Bretton Woods agreements which also established the International Monetary Fund.
• Its five organizations are 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).
  • IFC mobilizes private sector investment and provides advice. IFC also acts as an investor in capital markets and will help governments privatize inefficient public enterprises.
  • MIGA supports direct foreign investment into a country by offering security against the investment in the event of political turmoil.
  • ICSID works towards a settlement in the event of a dispute between a foreign investor and a local country.

Add Ons:-

• The World Bank is a component of the World Bank Group.
• To become a member, however, a country must first join the International Monetary Fund (IMF).
• The president of the World Bank is nominated by the largest shareholder, which is the United States and members are represented by a board of governors.

Prelims Question

Consider the following statements regarding World Bank group:
1.It was founded along with International monetary Fund (IMF).
2.The president of World Bank is nominated by the United States.
Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2

Answer to prelims question