international finance corporation final 2

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    INTERNATIONAL FINANCIALINSTITUTIONS

    By:- Dipali

    AmitPallavRama

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    INTERNATIONAL MONETARY

    FUND

    It is an organization to monitor the properconduct of the international monetary system.

    A source of liquidity to member countries

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    OBJECTIVES

    To promote international monetarycooperation

    To facilitate expansion and balancedgrowth of international trade.

    To promote exchange stability

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    To assist in establishment of multilateral system of payment

    To give confidence to members bymaking general resources of fundavailable to them temporarily.

    To lessen the degree of disequilibrium

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    STRUCTURE

    Central office: Washington

    No of members: 181

    Highest authority: board of Governors

    Board of Executive Directors:24

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    RESOURCES

    QUOTAS: represent the subscription by amember country to the capital fund of IMF

    SDRs: are the entitlements granted to membercountries enabling them to draw from the IMFapart from their Quotas.

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    GENERAL ARRANGEMENTS TO

    BORROW

    Was started in 1962

    Group of 10 lend to IMF upto the agreed limit

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    Drawing from IMFTranche policies

    Reserved tranche

    Credit trancheCompensatory financing facility

    Buffer stock financing

    Extended fund facility

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    Standby arrangements

    Special oil facility

    Enlarged access policy

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    Special Drawing RightsNature of SDRs

    Allocation

    Utilization

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    Use of SDRs1. Tansaction with designation

    2. Transaction without designation

    3. Transaction with the fund

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    INTERNATIONAL BANK FORRECONSTRUCTION ANDDEVELOPMENT (IBRD)

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    FUNCTIONSAssists in reconstruction and developmentof territories of member government.It facilitate investment of capital for

    productive purposes.Promotes foreign private investment byguarantees of or through participation inloans.Make loans from its own resources or from

    the fund borrowed by it.It promote long range growth of trade andmaintain equilibrium in BOP.

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    LENDING ACTIVITIESBy making or participating in directloans out of its own fund.

    By making or participating in directloans out of funds raised in themarket of a member, or otherwiseborrowed by the bank.

    By guaranteeing in whole or in partloans made by private investorsthrough the usual investmentchannels.

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    POLICIES FOR LENDING LOANSAll loans are made to government or theymust be guaranteed by governments.Repayment is to be made within 10 to 35years.Loans are made only in circumstances inwhich other sources are not readilyavailable.

    Investigation are made of the probability of repayment, considering both the soundnessof the project and the financialresponsibility of the government.

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    Cont.Sufficient surveillance is maintainedby the bank over the carrying out of

    project to assure that it is relativelywell executed and managed.Loans are sanctioned on economicand not political considerations.

    The loan is meant to finance theFOREX requirements of specificprojects.

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    ORGANISATIONIBRD is an inter governmental organization.Only governments can be its members.Total members are 184.

    Five biggest share holders are USA, UK,GERMANY, JAPAN & FRANCE.It have Board of Governors, Exec. Directors anda President.President acts as a Chairman of Board of Directors.

    Ultimate authority lies in BOGVoting rights are in proportion to the sharecapital of the member countries which arerepresented by Governors and Exec. Directors.

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    RESOURCESInitial authorized capital was USD 10,000million, divided into 100,000 shares of USD100,000 each. Of share capital-

    2% is payable by member country in gold or inUSD. This portion is freely available for lending.18% is payable in members own currency. Thisportion is available for lending with consent of member whose currency is involved.

    80% is kept in reserve to be paid by themember when called.Total authorized capital as on June 1994 isUS$ 170 Bn.

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    INTERNATIONALFINANCIAL CORPORATION

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    IntroductionIt is an affiliate of the IBRDIFC was established in 1956

    It shares the primary objective of allWorld Bank Group institutionsIFC is the largest multilateral sourceof loan and equity financing forprivate sector projects in thedeveloping world.

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    VISION

    Its vision is that people should have

    the opportunity to escape poverty andimprove their lives.

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    OrganisationOnly members of the world bank canbecome its members

    The powers of IFC are vested in theboard of Governors which normallymeets once in a year.The 22 Executive Directors of theworld bank constitute the Board of Directors of the IFC

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    Member CountriesIFC has 182 member countries.

    To join IFC, a country must:

    Be a member of the World BankHave deposited with the World BankGroup's Corporate Secretariat anInstrument of Acceptance of IFC'sArticles of Agreement.

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    Where IFC Works

    IFC invests in enterprises majority-owned by the private sector throughoutmost developing countries in the world.

    Developing regions include:Sub-Saharan AfricaEast Asia & the Pacific

    South AsiaEurope & Central AsiaLatin America & the CaribbeanMiddle East & North Africa

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    Primary FunctionsIt promotes sustainable private sectordevelopment primarily by:

    Financing private sector projects andcompanies located in the developingworld.Seeks to bring together investmentopportunities, private capital & experienced management

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    Providing advice and technicalassistance to businesses and

    governments.It encourages joint ventures betweendeveloped & developing countries

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    Development Activities

    Project Identification And Promotion

    Promoting financing privateenterpriseEncouraging the growth of capitalmarkets in the developing countries

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    ResourcesCapital contributed by its membercountries

    Accumulated reserveIt can borrow from world bank

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    EvaluationIt had a slow beginningMuch of its assistance was

    concentrated in Latin and centralAmerican countriesNow it has diversified its area of operations in many developingcountries

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    India has also received substantialassistance from IFC

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    Thank you