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 financial assets is still far away. The government owned banks and financial institutions are given in this assignment.
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 financial assets is still far away. The government owned banks and financial institutions are given in this assignment.
B a n g l a d e sh s h S h i lp lp a B a n k ( B S B )
Bangladesh Shilpa Bank is a specialized institution to provide short and long term loan to the industrial sector in Bangladesh.
Formati Formatio on and Stru Struct ctur ure: e: Bangladesh
Shilpa Bank is the state owned prime development financing institution (DFI) in the country for extending financial assistance for industrialization. ³Shilpa´ 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 assisti ng in balancing, modernization, 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 Division Department Zonal Office Branch Office Manpower
-
Dhaka 5 21 3 15 769
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). Ob jectives:
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 prepara tion 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: y
Paid-up Capital
y
Loan from Government of Bangladesh
y
Loan from Bangladesh
y
Different Loan Giving (Foreign) Agencies
y
Customer ¶s Deposit
Bank
(Central Bank)
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) (ii)
Outright purchase of shares and 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 mad e 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.
B a n g l ad e s h S h i l p a R i n S a n g s t h a (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 Corpora tion 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 execut ive 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, K HULNA 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 exec utive 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 assistance to public l imited 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
and
debenture
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.
B a n g l a d e sh K r is h i B a n k ( B K B )
Formation: Bangladesh
Krishi Bank (BK B) is a 100% government owned specialized Bank in Bangladesh. KRISHI means Agriculture. Since its inception, BK B is financing in agricultural sector remarkably. BK B also performs commercial banking. People working abroad can easi ly send money home through BK B¶s Taka Drawing Arrangement. Bangladesh Krishi Bank (BK B) established in 1973 as a specialized government bank for agricultural development under the Bangladesh Krishi Bank Order (P O No. 27 of 1973). BK B 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 Pa kistan (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: BK B
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. BK B 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 selfemployment schemes of educated unemployed youths. Ob jectives:
The primary objective of BK B is to provide credit faciliti es 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: y
y
y
y
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 BK B is Khondkar Ibrahim Khaled and Managing Director is Md. Mukter Hussain.
Functions: BK B
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, BK B is supposed to give preference to the credit needs of small farmers and other disadvantaged groups. BK B, 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 includ ing 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 agricultura l produces etc. Long Term Loans: Period of amortization is over 5 years. Such loans are advanced for heavy capital investment and projects having long g estation period, e.g., tractor, power tiller, shallow tube-well, construction of ice plants, extension o f 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 BK B 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: BK B
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.
R a js h a h i K r is h i U n n a y a n B a n k (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 branc hes 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 alleviat ion 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 c an¶t go to the rural farmer to serve them. Its inefficient management and corrupted officials hinders it main objectives.
I n t e r n a t io n a l B a n k f o r R e c o n s t r u c ti on a n d D e v e lo p m e n t (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 middleincome 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 t he 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.
Ob jectives:
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 provis ion 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.
I sl a m i c D e v e lo p m e n t B a n k ( ID B )
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. Ob jectives:
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 ID B, in its 31st 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 banks 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 fullfledged Regional Office. The bank also has field representativ es 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.
A s i a n D e v e l op m e n t B a n k ( A D B )
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: ADBs 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 worlds 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, AD B's main instruments comprise loans, technical assistance, g rants, 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 inves tors 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 - AD B 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
M
onetary Fund (IM F )
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 povert y around the world. The International Monetary Fund (IMF) is the international organization that provides policy advice and financing to members in econom ic 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. Ob jectives:
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 t echnical 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
