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According to Syllabus

List of Specialized Banks

Bangladesh Shilpa Bank (BSB)

Bangladesh Shilpa Rin Sangstha (BSRS)

Bangladesh Krishi Bank (BKB)

Rajshahi Krishi Unnayan Bank (RAKUB)

International Bank for Reconstruction and


Development (IBRD)

Islamic Development Bank (IDB)

Asian Development Bank (ADB)

International Monetary Fund (IMF)


Specialized Banks

In many countries the specialized banks have overtaken the commercial

banks in terms of control over financial asset and financial intermediation. But

in our country few specialized banks who were created by taking over

erstwhile pre-liberation Pakistani companies could not even meet the

requirements of the purpose for which they were created. There contribution

in commercial sector is very insignificant. The diversification of their activities

towards gaining control over financial assets is still far away. The government-

owned banks and financial institutions are given in this assignment.


Bangladesh Shilpa Bank (BSB)

Bangladesh Shilpa Bank is a specialized institution to provide short and


long term loan to the industrial sector in Bangladesh.

Formation and Structure:


Bangladesh Shilpa Bank is the state owned prime development financing
institution (DFI) in the country for extending financial assistance for
industrialization. “Shilpa” means industry. It established under the Bangladesh
Shilpa Bank Order 1972 (Presidential Order No. 129 of 1972) on 31 October
1972, to provide credit facilities and equity support to industrial enterprises in
Bangladesh. It has been assigned the functions of former Industrial
Development Bank of Pakistan and The Equity Participation Fund.

Now, Bangladesh Development Bank Limited (BDBL), fully state owned


Commercial Bank of Bangladesh has emerged by merger of former Bangladesh
Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangstha (BSRS). In addition
commercial banking, BDBL provides financial and technical assistance to
broaden the private as well as public sector industrial base of the country. It
prioritizes, especially, Export Oriented/Export Linkage industrial units,
Efficient Import Substitution, Joint Ventures, Commercialization of local
technology and promotion of agro-based industry.

The prime objective of the bank is to accelerate industrial growth in the


country by financing industries, by providing advisory services in setting up
new projects, and by assisting in balancing, modernization, replacement and
expansion (BMRE) of existing industrial units.

The authorized and paid up capital is Tk. 2,000 million divided into 2
million shares of Tk. 1,000 each.
Organizational Structure:
 Head Office -  Dhaka
    Division -  5
    Department -  21
    Zonal Office -  3
    Branch Office -  15
    Manpower -  769

Management:

Board of Directors consists of 9 (nine) members including the Chairman


and the Managing Director. The Managing Director is the Chief Executive
Officer (CEO) of the Bank. Current Chairman and members are Nazem A.
Chowdhury (Chairman), Elias Ahmed (Director), Dr. Mohammad Ayub Miah
(Director), Syed Monjurul Islam (Director), Md. Mizanur Rahman (Managing
Director), Amalendu Mukherjee (Director), Md. Wazed Ali Khan (Director),
Ms Dilruba, Mahbub Ahmed (Director).

Objectives:

The main objective of BSB is to aid industrial development by providing


credit facilities and equity support for accelerating the process of
industrialization of the country.

Functions:

 Extends long and medium term loan facilities in local and foreign
currencies to industrial projects (both new and BMRE) in the private and
public sectors as well as partnership & proprietorship concern.

 Provide working capital loans to Industrial units.

 Provide equity support by way of participation in the equity of the


company in the form of underwriting and bridge finance to public limited
companies.

 Issues guarantees on behalf of borrowers for repayment of loan.


 Extend commercial banking service along with deposit mobilization,
foreign business, L/C handling, foreign remittances inland & outland.

 Purchases and sells shares/securities for BSB and on behalf of customers


as a member of Dhaka Stock Exchange (DSE) Ltd. and Chittagong Stock
Exchange (CSE) Ltd. for capital market development and

 Conducts project promotional activities along with preparation of various


sub-sectoral studies.

 Involve in Capital market activities by way of under writing and


extending bridge finance to public limited companies.

Operating Policies:

Public and private sector projects are eligible to BSB’s financing


assistance. In the private sector, assistance will be extended to those industries
indicated in the Industrial Investment Schedule published by the Government
from time to time and to industries not specified in the Industrial Investment
Schedule if their financial and economic merits can be established and that too
under policy directives given by the Ministry of Finance. In the public sector,
assistance will normally be extended only to those projects which have been
approved by the Government and included in its Annual Development
Programme (ADP) and which meet BSB’s economic and financial eligibility
criteria.

Fund allocated by the Government for public sector projects can be


administrated by BSB on payment by such projects on a commission at an
agreed rate.

New loans will not normally be sanctioned for projects in default until
such time as satisfactory arrangements have been reached with BSB Project
Promotion to repay or reschedule the amount in default.

BSB provides all reasonable assistance to prospective borrowers in


identifying industrial project possibilities of financial and economic merit and
furnishes relevant information about plant and machinery, product and process,
raw materials and market for products and other related matters. It helps the
borrowers to overcome the problems associated with implementation and
operation of their project. BSB also assists local entrepreneurs in setting up
viable projects in collaboration with foreign investors. Viable projects in the
public or private sector is eligible for financial assistance from the bank.

Sources of Fund:

 Paid-up Capital
 Loan from Government of Bangladesh
 Loan from Bangladesh Bank (Central Bank)
 Different Loan Giving (Foreign) Agencies
 Customer’s Deposit

Investment Priorities:

In the private sector, BSB lending operations will be confined primarily


to the industrial sectors included in the Industrial Investment Schedule, if it is
reasonably convinced that investment viable and socially desirable too.

Financial assistance provided by the bank is expected to give a boost to


the process of the country’s economic development. The BSB financed
industrial units will not only provide additional goods and services but will also
help creating employment opportunities, foreign exchange earnings and savings.

Types of Financial Assistance:

Term Loans:
BSB extends long term loans in foreign currency and /or local currency
for setting up new industrial projects and /or for balancing, modernization,
replacement and expansion of existing industrial enterprises.

Bridge Financing:
BSB also extends short term bridge financing by making advances
against shares underwritten to enable (i) a company to go into commercial
production before floating the shares for public subscription, or (ii) release of
fund against Annual Development Plan allocations by the government in respect
of public sector projects.

Working Capital Loans:


BSB provides short-term loans on a limited scale to meet the working
capital needs of industries it has financed.

Equity Support:
BSB provides equity support to limited liability companies only for
financing industrial projects by way of

(i) Outright purchase of shares and


(ii) Underwriting the issue of shares either directly or through
consortium of banks and financial institutions.

Guarantees for Credits/Loans:


BSB may provide guarantees for credits/loans raised by industrial
projects from other sources.

Security for Loans:

BSB will obtain adequate security coverage to protect its exposure in any
loan. Loans will usually be secured by mortgage, hypothecation of existing
assets of the project and / or the assets to be created with BSB’s financial
assistance.

Repayment:

Repayment of loans and guarantees should be made in accordance with


the repayment schedule drawn up on the basis of the repayment capacity of the
project or in accordance with the amortization schedule of the foreign credit line
under which the sub-loan is accommodated up to a maximum period of 15
years.
Weakness:

Though BSB plays an important role in industrialization in Bangladesh,


sometimes political government influences its activities and hampers its
objectives. For corrupted official’s inefficient management it can’t determine
profitable projects. Moreover, in many cases its interest rate is higher than
normal bank rate.
Bangladesh Shilpa Rin Sangstha
(BSRS)

Formation:

Bangladesh Shilpa Rin Sangstha (BSRS) established on 31 October


1972 by the President's Order No. 128 of 1972 to provide credit facilities and
other assistance to industrial concerns and to encourage and broaden the base of
investment in Bangladesh. BSRS was vested with the undertakings of the
Pakistan Industrial Credit and Investment Corporation Limited (PICIC),
Investment Corporation of Pakistan, and National Investment Trust (NIT)
located in Bangladesh. Later, on 16 March 1987, the Investment Advisory
Centre of Bangladesh (IACB) was merged with BSRS.

At the time of establishment, the authorized and paid up capital of BSRS


was Tk. 1,000 million and Tk. 62.54 million respectively. On 30 June 2000, the
amounts stood at Tk. 2,000 million and Tk. 700 million respectively.

The objective was to provide credit facilities vis-à-vis related assistance


to large industrial concerns and to encourage/broaden the Investment base in
Bangladesh. Later on Investment advisory Centre of Bangladesh (ICAB) was
also merged with the Sangstha in 1987.

Organizational structure:

It has 350 employees, including executive officers of different cadres.


BSRS has 20 operational departments under 4 divisions at its head office in
Dhaka and a commercial branch. It also has 4 branch offices outside Dhaka, one
each at CHITTAGONG, RAJSHAHI, KHULNA and SYLHET.

Funds:

At the initial stage, the Sangstha, used to receive significant foreign fund
from World Bank, UNDP, Asian Development Bank, OPEC, Saudi Arabia,
Germany and other countries for industrialization and to achieve the objective
for which it was established. From 1972 the Sangstha granted term loans to
various industries in different sectors of the economy.

Vision:

To be recognized and accepted as a leading specialized bank in


Bangladesh.

Mission:

 Serve the Customer with utmost care and responsibility.


 Expedite industrialization process in Bangladesh.
 Play unique role in Capital Market Development in Bangladesh.
 Adopt modern banking technique to serve the market.
 Create a good work environment for employees and foster team work and
career development.
 Operate esthetically and maintain transparency in operations.

Management:

The management of BSRS is vested in a 9-member board of directors,


including a chairman and a managing director appointed by the government.
The managing director is the chief executive officer of the organization.

Functions:

 Provide medium and long-term credit facilities in both foreign and local
currencies to private sector industrial projects.
 Provide underwriting, bridge financing and debenture financing
assistance to public limited companies.
 Finance public sector projects without any ceilings and undertook
industrial promotional activities, especially in less developed areas.
 provide equity finance, guarantees, deferred payments for machinery
imported from abroad under suppliers' credit, guarantee and counter
guarantee for loans, debts, credits, performance of contracts and financing
arrangements with foreign lending agencies, as well as local banks and
financial institutions for industrial concerns.
 Does commercial banking operation is directed towards deposit
mobilization, issue of pay order and SDR, collection through a clearing
house and sale and purchase of ICB unit certificates, saving certificates
and PRIZE BONDs.
 Work as banker to the public issue of shares and debentures of companies
through commercial banks.

Bangladesh Krishi Bank (BKB)

Formation:
Bangladesh Krishi Bank (BKB) is a 100% government owned specialized
Bank in Bangladesh. KRISHI means Agriculture. Since its inception, BKB is
financing in agricultural sector remarkably.  BKB also performs commercial
banking. People working abroad can easily send money home through BKB’s
Taka Drawing Arrangement. Bangladesh Krishi Bank (BKB) established in
1973 as a specialized government bank for agricultural development under the
Bangladesh Krishi Bank Order (P O No. 27 of 1973). BKB is Banking
Company under the Banking Company Act-1991. It is the successor to the
former Agricultural Development Bank of Pakistan, which was established in
1961 through merging the Agricultural Development Finance Corporation
(established 1952) and the Agricultural Bank of Pakistan (established 1957) into
one institution.

Organizational structure:

Its Head Office is located at Krishi Bank Bhaban, 83-85 Motijheel


Commercial Area, Dhaka-1000, Bangladesh. The Bank operates its function
through its 952 branches (except Rajshahi Division) of which 822 are rural and
130 are urban. It has 15 foreign exchange (Authorized dealer) branches. In the
field level the Bank has 8 Divisional, 21 Chief Regional and 30 Regional
offices for close supervision of the branch activities. For smooth operation, s a
part of internal control and compliance system, the bank has also 56 field level
audit offices of which 5 at Divisional and 51 at Regional levels. In the Head
Office, the Bank has 4 Divisions headed by General Managers and 28
Departments including Local Principal Office and Training Institute headed
by Deputy General Managers. The existing strength of Bank's manpower is
10275 against the approved strength of 13680 as on 31 March, 2009.

Capital:

BKB has an authorized capital of Tk. 15,000 Million (Taka Fifteen


thousand Million) only and paid up capital of Tk. 9000 Million (Taka Nine
thousand Million) only which is fully paid by the government. The Bank started
commercial functioning since 1977 to generate more loan able fund from the
idle rural and urban savings and invest them for the betterment of our economy.
Areas of Operations:

The major economic areas in which Krishi Bank lend are agriculture,
hunting, forestry and fishing, industries of all categories, wholesale and retail
trade, and hotels, insurance, real estate and business services, transport, storage
and communication, special credit programs, including poverty alleviation, and
others. BKB also finances numerous projects and special programs like Special
Agricultural Credit Program, potato cultivation and preservation, tea plantation,
installation of hand pumps, shallow and deep tube wells, the Rural Finance
Experiment Project, projects in dairy farming, poultry, fisheries, aquaculture
and livestock, loans for production and marketing of tobacco, banana and
cotton, the Betagi Community Forest Project, Swanirvar Bangladesh and self-
employment schemes of educated unemployed youths.

Objectives:

The primary objective of BKB is to provide credit facilities to the farmers


for the development of agriculture and entrepreneurs engaged in development of
agro-based and cottage industries.

Management:

The Bank has a Board of Directors comprising of 8 members. The Board


is headed by a Chairman. The Directors represent both public and private
sectors and are appointed by the government. The Board Chairman is generally
an experienced professional/ex-professional who has wide acceptability and
rapport. The Managing Director is the Chief Executive of the Bank. He is
appointed by the government.  The Bank has two posts of Deputy Managing
Directors and is appointed by the Government. The Bank has 14 posts of
General Manager. They are also appointed by the Government. In the Head
Office there are 4 Divisions each headed by a General Manager. The divisions
are:

 Administration Division
 Planning & Operation Division 
 Accounts Division and
 Loan Recovery Division

Under the control and supervision of the above four divisions 28


departments are working in the head office headed by Deputy General
Managers.

Current Chairman of BKB is Khondkar Ibrahim Khaled and Managing Director


is Md. Mukter Hussain.

Functions:

BKB provides credit facilities to individual and corporate bodies engaged


in CROP production, horticulture, forestry and fisheries. It also offers financial
and technical assistance to agro-based and cottage industries.

Under the provisions of its charter, BKB is supposed to give preference to


the credit needs of small farmers and other disadvantaged groups. BKB,
therefore, has to fulfill both social and economic objectives. Being a scheduled
bank, it also receives deposits in various accounts, performs foreign exchange
business, and other banking functions.

The bank gives preference to financing crop production in a package. It


offers short, medium, and long-term financing for production, processing,
warehousing and marketing of agriculture and agro-based industrial products.
Loan terms are determined by the purpose for which it is given, the gestation
period, and income generating capacity. The bank provides short-term loans
generally for seasonal agricultural production activities. The medium-term loans
are sanctioned for acquisition of farm machinery, low lift pumps, hand pumps,
agricultural implements, bullocks, carts, goats, dairy, poultry, and draft animals,
transportation facilities for agricultural produces, and related development
activities. Long-term loans are advanced for capital expenditures including
purchase of tractors, power tillers and shallow tube wells, construction of ice
plants, establishment of agro-based industries, extension of tea gardens or
investment in horticulture, forestry and fisheries. Amortization period for short-
term loans is 18 months, for medium-term loans up to 5 years and for long-term
loans over 5 years.
Loan Portfolio:

Loan Period:
Bank advances loans for short, medium and long terms. The term of loan
is determined on the basis of gestation period of a project and generation of
income by use of the loan.

Short Term Loans:


Period of amortization is over 18 months. Such loans are generally
provided for seasonal agricultural production activities.

Medium Term Loans:


Period of amortization is over 18 months and up to 5 years. Such loans
are used for acquisition of farm machinery, shallow tube-well (project) lift
pump, hand pump, agricultural implements, bullock carts, boats, dairy, poultry,
for purchase of draft animals and for transportation facilities for agricultural
produces etc.

Long Term Loans:


Period of amortization is over 5 years. Such loans are advanced for heavy
capital investment and projects having long gestation period, e.g., tractor, power
tiller, shallow tube-well, construction of ice plants, extension of tea gardens and
development of horticulture, fishery etc.

Security:

Short-term loans are generally granted on pledge or hypothecation of crop


production and also against surety.

Medium and long term loans are granted against security of land or
building, bank guarantee, fixed deposit, farm machinery and other assets created
out of loans. In case of big projects, loans are granted on the security of the
project on average 30% participation by the loaner in project cost.

Bangladesh Krishi Bank loans made wide economic activities created and
social impact. Various economic activities created and supported by BKB loans
substantially helped ease unemployment and under-employment problem in the
rural areas. The bank’s policy and procedure are constantly reviewed so as to
include more small farmers and operators within the fold of its credit
programme to make optimum use of natural resources and create employment
opportunities in rural areas.

Weakness:

BKB is providing loan to the rural farmer, but its loan recollection is not
satisfactory rate. Sometimes rural farmer are bound to sell their land to repay
the loan. Its large organ creates various problems over its management. Peoples
suffer a lot to get loan due to lengthiness of administration.

Rajshahi Krishi Unnayan Bank


(RAKUB)

Formation:
Rajshahi Krishi Unnayan Bank (RAKUB), the largest development
partner in agricultural finance in the Northwest Bangladesh, is a state-owned
bank in Bangladesh specialized financial institution for financing development
of AGRICULTURE and its backward and forward linkage industries in the
Rajshahi division. It was established by the President's Ordinance No. 58 of
1986 with the aim of providing institutional agricultural credit for optimum
utilization of agricultural potentials of Rajshahi Division. Taking over the
branches and offices along with assets and liabilities of the Bangladesh Krishi
Bank within Rajshahi division (Rajshahi and Rangpur Division at present), the
bank started functioning on 15 March 1987.

Organizational Structure:

The head office is stationed at divisional headquarters city of Rajshahi.


The branches network of the bank comprises 357 branches including one in
Dhaka. Eighteen zonal offices stationed in district headquarters control branches
under them. The General Manager's office at Rangpur oversees activities of 12
zones of greater Rangpur, Dinajpur and Bogra districts. There are 18
independent regional audit offices for conducting regular audit in branches and
zonal offices. The only training institute of the bank is situated at Rajshahi.
There are 3,464 employees working in the bank of which 1,525 are officers and
1,939 are staff. 

Capital:
Rajshahi Krishi Unnayan Bank (RAKUB) extends credit facilities for
Crop production, Livestock & Poultry, Farm machinery, Fishery, Agro-
industries and agri-business, Continuous credit, Poverty Alleviation and more.
Authorized capital of this bank amounts to Tk. 1800 million. At present Paid-up
capital amounts to Tk. 1800 million and reserve Tk. 208.50 million.

Management:

The Board is vested with the responsibility of formulation of policy in


line with attainment of growth in agriculture and economic development of the
region through agricultural credit support. The Board of Directors is constituted
by seven members, all appointed by the government. Besides, for emergency
decisions there is an executive committee constituted of the Chairman of the
Board and two other members: the Managing Director and one of the Directors
elected by the Board. The Managing Director is the chief executive of the bank.
Functions:
 
As the largest development partner in the northwest region, Rajshahi
Krishi Unnayan Bank aims at overall development of farmers and all the sectors
and sub-sectors of agriculture in this region. Besides, catering to agricultural
credit the bank performs ancillary functions as financing agri-business and agro-
based industries and poverty alleviation programs.

RAKUB’s extend credit facilities for: Crop production, Livestock &


Poultry, Farm Machinery, Fishery, Agro-industries and agri-business,
Continuous credit, Poverty Alleviation and more.

Weakness:
Though RAKUB provides credit facilities, it can’t go to the rural farmer to
serve them. Its inefficient management and corrupted officials hinders it main
objectives.
International Bank for
Reconstruction and Development
(IBRD)

Formation:

The International Bank for Reconstruction and Development (IBRD)


is one of five institutions that comprise the World Bank Group. The IBRD is an
international organization whose original mission was to finance the
reconstruction of nations devastated by World War II. Now, its mission has
expanded to fight poverty by means of financing states. Its operation is
maintained through payments as regulated by member states. It came into
existence on December 27, 1945.

IBRD is the part of the World Bank (IBRD/IDA) that works with middle-
income and creditworthy poorer countries to promote sustainable, equitable and
job-creating growth, reduce poverty and address issues of regional and global
importance.

IBRD owned and operated for the benefit of its 186 member countries.
Delivering flexible, timely and tailored financial products, knowledge and
technical services and strategic advice helps its members achieve financial
results. Through the World Bank Treasury, IBRD clients also have access to
capital on favorable terms in larger volumes, with longer maturities, and in a
more sustainable manner than world financial markets typically provide.

Funds:

IBRD raises most of its funds on the world’s financial markets and has
become one of the most established borrowers since issuing its first bond in
1947. The income that IBRD has generated over the years has allowed it to fund
development activities and to ensure its financial strength, which enables it to
borrow at low cost and offer client’s good borrowing terms.
Objectives:

The International Bank for Reconstruction and Development (IBRD)


aims to reduce poverty in middle-income and creditworthy poorer countries by
promoting sustainable development through loans, guarantees, risk management
products, and analytical and advisory services.

Functions:

Delivering flexible, timely and tailored financial products, knowledge and


technical services and strategic advice helps its members achieve results.
Through the World Bank Treasury, IBRD clients also have access to capital on
favorable terms in larger volumes, with longer maturities, and in a more
sustainable manner than world financial markets typically provide. Specially,
the IBRD:

 Supports long term human and social development needs that privet
creditors do not finance;
 Preserves borrower’s financial strength by providing support in crisis
periods, which is when poor people are most adversely affected;
 Uses the leverage of financing to promote key policy and institutional
reforms (such as safety net or anticorruption reforms);
 Creates a favorable investment climate in order to catalyze the provision
of private capital;
 Provides financial support (in the forms of grants made available from the
IBRD’s net income) in areas that are critical to the well-being of poor
people in all countries.

Middle-income countries, where 70% of world’s poor live, have made


profound improvements in economic management and governance over the past
two decades and are rapidly increasing their demand for the strategic,
intellectual and financial resources the World Bank has to offer. The challenge
facing the IBRD is to better manage and deliver its resources to best meet the
needs of these countries. To increase its impact in middle-income countries,
IBRD is working closely with the International Finance Corporation (IFC), the
Multilateral Investment Guarantee Agency (MIGA), the International Monetary
Fund (IMF) and other multilateral development banks. In the course of its work,
IBRD is also striving to capitalize on middle-income countries own
accumulated knowledge and development experiences and collaborates with
foundations, civil society partners and donors in the development community.

Weakness:

In the name of helping the poorer countries, it acts as an instrument to


absorb the poorer countries by the rich countries. It provides prescription to the
poorer countries how to use their wealth. It is actually creates impediment to
their independency.
Islamic Development Bank (IDB)

Formation:
Islamic Development Bank (also known as IDB), is a multilateral
development financing institution of which principal office located in Jeddah,
Saudi Arabia. The Islamic Development Bank is an international financial
institution established in pursuance of the Declaration of Intent issued by the
Conference of Finance Ministers of Muslim Countries held in Jeddah in Dhul
Q'adah 1393H, corresponding to December 1973. The Inaugural Meeting of the
Board of Governors took place in Rajab 1395H, corresponding to July 1975,
and the Bank was formally opened on 15 Shawwal 1395H corresponding to 20
October 1975.

Objectives:

The main purpose of the Bank is to foster the economic development


and social progress of member countries and Muslims communities individually
as well as jointly in accordance with the principles of Shari’ah i.e., Islamic Law.

Membership:
The present membership of the Bank consists of 56 countries. The basic
condition for membership is that the prospective member country should be a
member of the Organization of the Islamic Conference (OIC), pay its
contribution to the capital of the Bank and be willing to accept the IDB Board
of Governors may decide upon such terms and conditions as may be decided
upon by the IDB Board of Governors.
Functions:

The functions of the Bank are to participate in equity capital and grant
loans for productive projects and enterprises besides providing financial
assistance to member countries in other forms for economic and social
development. The Bank is also required to establish and operate special funds
for specific purposes including a fund for assistance to Muslim communities in
non-member countries, in addition to setting up trust funds. The Bank is
authorized to accept deposits and to mobilize financial resources through
Shari'ah compatible modes. It is also charged with the responsibility of assisting
in the promotion of foreign trade especially in capital goods, among member
countries; providing technical assistance to member countries; and extending
training facilities for personnel engaged in development activities in Muslim
countries to conform to the Shari'ah.

Currency:

The unit of account of the bank is the Islamic Dinar.

Capital:

Up to the end of 1412H (June 1992), the authorized capital of the Bank
was 2 billion Islamic Dinars (ID). Since Muharram 1413H (July 1992), in
accordance with a Resolution of the Board of Governors, it became 6 billion
Islamic Dinars, divided into 6, 00,000 shares. Its subscribed capital also became
4 billion Islamic Dinars. In 1422H, the board of governors decided to increase
the authorized capital form ID 15 billion and the subscribed capital from ID 8
billion. The Board of Governors of the IDB, in its 31 st Annual Meeting in
Kuwait, decided to increase the authorized capital stock of IDB by 15 billion to
become 30 billion Islamic Dinars and the subscribed capital by 7 billion to
become 15 billion Islamic Dinars.

Head Office and Regional Offices:

The bank’s principal office is in Jeddah in the Kingdom of Saudi Arabia.


Two regional offices were opened in 1994; one in Rabat, Morocco and the
other in Kuala Lumpur, Malaysia. In July 1996, the board of Executive Directors
also approved the establishment to an IDB Representative Office at Almaty,
Kazakhstan, to serve as a link between IDB member countries and Central
Asian Republics. The office became operational in July 1997 and is now a full-
fledged Regional Office. The bank also has field representatives in eleven
member countries. These are: Indonesia, Iran, Kazakhstan, Libya, Pakistan,
Senegal, Sudan, Gambia, Guinea Bissau, Mauritania and Algeria.

Financial Year:
The Bank's financial year is the lunar Hijri year.

Language:
The official language of the Bank is Arabic, but English and French are
additionally used as working languages.
Asian Development Bank (ADB)

Formation:
The Asian Development Bank (ADB) is a regional development bank
established in 1966 to promote economic and social development in Asian and
Pacific countries through loans and technical assistance. It is a multilateral
development financial institution owned by 67 members (as of 2 February
2007, 48 from the region and 19 from other parts of the globe).

Objectives:
ADB’s vision is a region free of poverty. Its mission is to help its
developing member countries reduce poverty and improve the quality of life of
their citizens. The work of the Asian Development Bank (ADB) is aimed at
improving the welfare of the people in Asia and the Pacific, particularly the 1.9
billion who live on less than $2 a day. Despite many success stories, Asia and
the Pacific remains home to two thirds of the world are poor.

Organizational Structure:

ADB's main partners are governments, the private sector, nongovernment


organizations, development agencies, community-based organizations, and
foundations. To ensure coherence over a wider geographical area, Regional
Cooperation Strategies and Programs are prepared for the five sub regions
covered by ADB's regional operations. The various stages that a project
undergoes in its planning and execution - from country programming to project
completion and evaluation - is collectively known as ADB's project cycle.

The highest decision making tier at ADB is its Board of Governors, to


which each of ADB's 67 members nominate one Governor and an Alternate
Governor to represent them. The Board of Governors meets formally once a
year at an Annual Meeting held in a member country. The Governors' day to
day responsibilities are largely delegated to the 12-person Board of Directors,
which performs its duties full time at ADB's HQ in Manila. The ADB
President, under the Board's direction, conducts the business of ADB. The
President is elected by the Board of Governors for a term of 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 current President is
Haruhiko Kuroda.

Fund:
The bank was conceived with the vision of creating a financial institution
that would be “Asian in character” to foster growth and co-operation in a
region that back then was one of the worlds poorest. ADB raises funds through
bond issues on the world’s capital markets, while also utilizing its members’
contributions and earnings from lending. These sources account fro almost
three quarters of its lending operations.

Functions:

Under Strategy 2020, a long-term strategic framework adopted in 2008,


ADB will follow three complementary strategic agendas: inclusive growth,
environmentally sustainable growth, and regional integration.

In pursuing its vision - an Asia and Pacific Free of Poverty, ADB's main
instruments comprise loans, technical assistance, grants, advice, and knowledge.

ADB works in partnership with governments and public and private


enterprises in its developing member countries on projects and programs that
will contribute to economic and social development, based on the country's
needs and priorities. Assistance to its developing member countries creates an
enabling environment for private sector development. ADB also directly
finances private sector projects to assist commercial investors and lenders. ADB
lending will be in five core operational areas, identified as comparative
strengths of ADB:

 Infrastructure, including transport and communications, energy, water


supply and sanitation and urban development
 Environment
 Regional cooperation and integration
 Finance sector development
 Education
ADB will continue to operate in health, agriculture, and disaster and
emergency assistance, but on a more selective basis.

Although most lending is in the public sector - and to governments - ADB


also provides direct assistance to private enterprises of developing countries
through equity investments, guarantees, and loans. In addition, its triple-A credit
rating helps mobilize funds for development through its co financing operations,
tapping official, commercial, and export credit sources. Activities of ADB
include:

 Expand government & private investment for development of the Asian


countries;

 Ensure proper utilization of recourses of the small and least developed


countries of the region for their economic development;

 Coordinate the development policies, plans and strategies of the member


countries;

 Expand cooperation with UN organs to develop new avenues for


investments;

 Assist in preparation of development plans, finance those and provide


technical assistance in the implementation of those plans.

The preferred areas of ADB finance are roads and communication, naval and
air port, gas, electricity, water supply and sanitation, irrigation, industry,
agriculture, fisheries, etc.
International Monetary Fund (IMF)

Formation:

The International Monetary Fund (IMF) is an organization of 187


countries, working to foster global monetary cooperation, secure financial
stability, facilitate international trade, promote high employment and
sustainable economic growth, and reduce poverty around the world. The
International Monetary Fund (IMF) is the international organization that
provides policy advice and financing to members in economic difficulties and
works with developing nations to help them achieve macroeconomic stability
and reduce poverty. It was created in July 1944 and its headquarters are in
Washington, D.C., United States.

Objectives:

To assist mainly low and middle-income countries in effectively


managing their economics, the IMF provides practical guidance and training on
how to upgrade institutions and design appropriate macro economic, financial
and structural policies.

The IMF provides loans to countries that have trouble meeting their
international payments and can not otherwise find sufficient financing on
affordable terms. This financial assistance is designed to help countries restore
macro economic stability by rebuilding their international reserves, stabilizing
their currencies and paying for imports---all necessary conditions for replanting
growth. The IMF also provides confessional loans to low-income countries to
help them develop their economic condition and reduce poverty.

Organizational Structure:

The IMF has a management team and 17 departments that carry out its
country, policy, analytical, and technical work. One department is charged with
managing the IMF's resources. This section also explains where the IMF gets its
resources and how they are used. A Managing Director, the head of the staff and
Chairman of the Executive Board, leads the IMF. A First Deputy Managing
Director and two other Deputy Managing Directors assist him. The
Management team oversees the work of the staff, and maintains high-level
contacts with member governments, the media, non-governmental
organizations, think tanks, and other institutions. Current Managing Director
is Dominique Strauss-Kahn, a French national; First Deputy Managing Director
is John Lipsky, an American; two other Deputy Managing Directors are Murilo
Portugal, from Brazil; and Naoyuki Shinohara, a Japanese national.

The IMF is accountable to the governments of its member countries. The


IMF is held accountable by multiple stakeholders, its own internal watchdog,
member governments, the media, civil society, and academia.

Functions:

The IMF promotes international monetary co-operation and exchange rate


stability, facilitates the balanced growth of international trade, and provides
resources to help members in balance of payments difficulties or to assist with
poverty reduction. More specifically, the IMF continues to:

 provide a forum for cooperation on international monetary problems


 facilitate the growth of international trade, thus promoting job creation,
economic growth, and poverty reduction;
 promote exchange rate stability and an open system of international
payments; and
 Lend countries foreign exchange when needed, on a temporary basis and
under adequate safeguards, to help them address balance of payments
problems.

The IMF supports its membership by providing

 policy advice to governments and central banks based on analysis of


economic trends and cross-country experiences;
 research, statistics, forecasts, and analysis based on tracking of global,
regional, and individual economies and markets;
 loans to help countries overcome economic difficulties;
 concessional loans to help fight poverty in developing countries; and
 Technical assistance and training to help countries to improve the
management of their economies.

Criticism:

It is often said that IMF works as a representatives of the western


countries in poorer countries rather than working as international organization.
Sometimes it creates pressure to the poorer countries to work with their
prescribed way instead of the countries own way.

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