Global Institutions: World Bank | Economy for UPSC 2024 (Pre & Mains) PDF Download

 Page 1


ECONOMY
GLOBAL 
INSTITUTIONS
WORLD BANK
Page 2


ECONOMY
GLOBAL 
INSTITUTIONS
WORLD BANK
WORLD BANK
The World Bank (WB) Group today consists of five closely 
associated institutions:
1. IBRD
2. IDA
3. IFC
4. MIGA
5. ICSID
Page 3


ECONOMY
GLOBAL 
INSTITUTIONS
WORLD BANK
WORLD BANK
The World Bank (WB) Group today consists of five closely 
associated institutions:
1. IBRD
2. IDA
3. IFC
4. MIGA
5. ICSID
INTERNATIONAL BANK FOR 
RECONSTRUCTION & DEVELOPMENT 
IBRD is the oldest of the WB institutions which started functioning (1945) in the 
area of reconstruction of the war-ravaged regions (World War II) 
Later it started lending for the development of middle-income & credit-worthy 
poorer economies of the world. 
Human development was the main focus of developmental lending with a very 
low interest rate (1.55 per cent per annum)—the areas of focus being 
agriculture, irrigation, urban development, healthcare, family welfare, dairy 
development, etc. 
It commenced lending for India in 1949.
Page 4


ECONOMY
GLOBAL 
INSTITUTIONS
WORLD BANK
WORLD BANK
The World Bank (WB) Group today consists of five closely 
associated institutions:
1. IBRD
2. IDA
3. IFC
4. MIGA
5. ICSID
INTERNATIONAL BANK FOR 
RECONSTRUCTION & DEVELOPMENT 
IBRD is the oldest of the WB institutions which started functioning (1945) in the 
area of reconstruction of the war-ravaged regions (World War II) 
Later it started lending for the development of middle-income & credit-worthy 
poorer economies of the world. 
Human development was the main focus of developmental lending with a very 
low interest rate (1.55 per cent per annum)—the areas of focus being 
agriculture, irrigation, urban development, healthcare, family welfare, dairy 
development, etc. 
It commenced lending for India in 1949.
INTERNATIONAL DEVELOPMENT AGENCY 
(IDA)
IDA, also known as the soft window of the WB, was set up in 1960 with 
basic aim of developing infrastructural support among member 
nations (mostly lower income countries), long-term lending for 
development of economic services. 
The loans or credits are for a period of 35-40 years, interest-free, 
except for a small charge to cover administrative costs. Repayment 
begins after a 10-year grace period. 
India had been the biggest beneficiary of the IDA support. 
Page 5


ECONOMY
GLOBAL 
INSTITUTIONS
WORLD BANK
WORLD BANK
The World Bank (WB) Group today consists of five closely 
associated institutions:
1. IBRD
2. IDA
3. IFC
4. MIGA
5. ICSID
INTERNATIONAL BANK FOR 
RECONSTRUCTION & DEVELOPMENT 
IBRD is the oldest of the WB institutions which started functioning (1945) in the 
area of reconstruction of the war-ravaged regions (World War II) 
Later it started lending for the development of middle-income & credit-worthy 
poorer economies of the world. 
Human development was the main focus of developmental lending with a very 
low interest rate (1.55 per cent per annum)—the areas of focus being 
agriculture, irrigation, urban development, healthcare, family welfare, dairy 
development, etc. 
It commenced lending for India in 1949.
INTERNATIONAL DEVELOPMENT AGENCY 
(IDA)
IDA, also known as the soft window of the WB, was set up in 1960 with 
basic aim of developing infrastructural support among member 
nations (mostly lower income countries), long-term lending for 
development of economic services. 
The loans or credits are for a period of 35-40 years, interest-free, 
except for a small charge to cover administrative costs. Repayment 
begins after a 10-year grace period. 
India had been the biggest beneficiary of the IDA support. 
INTERNATIONAL FINANCE CORPORATION 
(IFC)
IFC, set up in 1956, is known as the private arm of the WB. 
It lends money to private sector companies of its member nations. The 
interest rate charged is commercial but comparatively low. 
It focuses on promoting economic development by encouraging the 
growth of productive enterprises and efficient capital markets in its 
member countries. 
There has been a great upsurge in IFC investments in India which has 
undoubtedly strengthened the foreign investors’ confidence in the 
Indian economy.