what is the world bank and what does it do
The International Bank for Reconstruction and Development (IBRD), also known as the World Bank was established on 27 December 1945 as a supplementary body to the International Monetary Fund and started its operations on 25 June 1946. Remember that this organization is a supplementary body of the International Monetary Fund and the countries which are members of the International Monetary Fund are also its members, at present the number of its members is 189 world bank.
Objectives of International Bank for Reconstruction and Development
The main objectives of the establishment of the World Bank can be explained as follows:
(1) Reconstruction and economic development of nations
The main objective of the World Bank is to rebuild the economies of war-wracked nations and provide more help to developed or less advanced countries to develop by exploiting their natural resources to the maximum.
(2) Promotion of investment of capital
Another important objective of the bank is to encourage foreign private investors to invest in production in such countries by guaranteeing their capital or participating in their investments or loans. If private investment is not available in sufficient quantity, then the bank will give some amount to the above countries in the form of loan for production activities from its own capital or from other funds which it has received.
(3) Promoting long-term international trade
The third objective of the World Bank is to provide for the long-term growth of trade.
(4) Establishment of peacetime economy
Another objective of the World Bank was to do its work in such a way that the wartime economy can be replaced with peacetime economy.
(5) Providing loan by giving guarantee
Before giving guarantee, the bank sees to what extent the demand of the borrower is genuine and to what extent the conditions of the lender are fair and just. The World Bank keeps track of the progress of the scheme related to the use of credit. For this, the loanee country has to submit the progress details to the bank from time to time. The bank itself also gets it checked by experts from time to time.
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Membership of the World Bank at present has increased to 189 member countries.
world bank functions
Following are the main functions of the World Bank
(1) Providing loans
The World Bank gives loans to the member countries in the following three ways:
(i) Direct Loans
These loans are given by the bank from its own means or by issuing debentures in the open markets.
(ii) Guaranteed Loans
These loans are given to private investors with a guarantee for various development schemes. The bank charges 1% commission for the guarantee. As per rules, the guaranteed loan amount should not exceed the sanctioned capital of the bank.
(iii) Joint loan
The World Bank also provides loans in collaboration with commercial banks. At present, these types of loans are very less.
(2) Technical assistance
The bank is also providing technical assistance to its member countries. With the aim of getting total information about the natural resources, economic and industrial prospects, means of transport etc. of the underdeveloped member countries, the bank has conducted and is conducting complete economic surveys. Apart from this, he keeps sending his experts to the member countries to assist in the planning related work.
(3) Training Functions
The Bank started a one-year training program for senior officials of member countries on January 1, 1949. From 1950 onwards, training programs for junior officers were also started on public finance and account-keeping. In 1955, the bank established an economic development school.
(4) Work of solving international problems
Being an impartial international institution, the World Bank also acts as an intermediary for the solution of international economic problems.
(5) Acquisition of financial means
To meet the credit needs of various countries, the program of obtaining loans has been started by the bank.
(6) International Development Association
This institution is provided by the more developed countries from the industrial point of view, through the relationship with the World Bank, to the underdeveloped and developing countries.
World Bank and India
(2) Technical assistance and training
Since the inception of the World Bank, at least 45 expert teams have visited India from time to time to guide us for the efficient operation of our plans. A Permanent Representative has been living in India from 1957-58, advising on plans and economic policies. In addition, in 1958-59, an expert came to India to advise the Industrial Credit and Finance Corporation (I.C.F.C.L) for one year.
(3) India Assistance Club (India Development Forum)
To help India face the difficulty of foreign exchange and to overcome this crisis, the World Bank convened a conference in Washington in 1958 and established 'India Aid Club', Apart from its bank and International Development Association, there are ten member nations which are as follows - United States of America, England, West Germany, France, Canada, Japan, Austria, Belgium, Italy and Netherlands India Aid Club on 22 June 1992 in Paris. In the meeting held, on the recommendation of the World Bank, an aid of $ 7.2 billion was approved for India and on July 2, 1993, an aid of $ 7.4 billion was approved for India by this club. The name of 'Bharat Sahayata Club' has now been changed to 'Bharat Vikas Manch'.
(4) world bank Help in foreign exchange crisis
Whenever India has faced serious foreign exchange crisis, the World Bank has helped India. For example, in 1958 it provided a loan of $100 million to India during a foreign exchange crisis.
(5) Cooperation in the establishment and finance of industries
World Bank has given advice to the industries experts
It has played an important role in the industrial development of the country by sending and training high officials.
(6) Arbitration in canal water dispute with Pakistan
As a result of the mediation of the World Bank, talks between India and Pakistan started in 1952 to end the dispute regarding water division of rivers to Punjab and finally in 1959 this dispute should be settled. Gone.
(7) Facility of normal loans
India should now also get the facility of normal loans, that is, India can use loans in some cases as per its wish. It is clear from the above discussion that the World Bank is India's real friend, helper and guide, because the economic, technical, educational and friendly cooperation that India has received is not only more in quantity but also remarkable in human values.
Criticisms of the World Bank
There is no doubt that during its tenure of more than 69 years, the World Bank has done commendable work in the direction of economic development of underdeveloped countries and reconstruction of the economy destroyed by war, but still it has been criticized. Following are the major criticisms of the World Bank
(1) Prejudice with the debtor countries
It is alleged that the World Bank works in favor of the debtor countries and against the lending countries, because the number of indebted countries in the World Bank is more, so the debtor countries have a majority. The reason disregards lender countries.
(2) High interest rate
The rate of interest charged by the World Bank is high. The aim of the World Bank should not be to make profit but to provide financial assistance to as many countries as possible. For this it is necessary that the World Bank should reduce its interest rate because if its goal is not only profit, then it will never succeed in its objective.
(3) Delay in giving loan
There is a lot of delay in giving loan by the bank. Because the country having debt in it has to complete many preparatory actions and in addition, before giving loan, more emphasis is given on the ability to repay the loan.
(4) Loans for agriculture
Loans are given by the bank to the underdeveloped countries mainly for agricultural purposes only. It does not give loans for basic industries. The loans given by the bank to India have been given only for the development of agriculture, irrigation, minerals and electricity.
(5) Emphasis on repayment capacity
Before giving loan, the World Bank thoroughly examines whether the country taking the loan has the ability to repay the loan or not. The repayment capacity automatically generates when the loan-oriented projects are completed. The bank should only see whether the project undertaken through that loan is productive or not.
(6) Inadequate Financial Aid
The financial assistance of the World Bank is insufficient to meet the growing needs of the member countries. The assistance given by the bank to developing countries is very less, so it was proposed that its amount should be increased
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