World Bank Group & Its Organisations: Summarised

Introduction 

World Bank Group is a Washington D.C based group of five International Organisations that provide loans to developing and underdeveloped countries. It is one of the largest development banks in the world and also it is an observer at the United Nations Development Group(UNDG). India is a member of 4 of its organisations viz. International Bank for Reconstruction and Development (IBRD), International Development Agency (IDA), International Finance Corporation (IFC) and (4). Multilateral Investment Guarantee Agency (MIGA). But India is not a member of International Centre for Settlement of Investment Disputes (ICSID).

International Bank for Reconstruction and Development (IBRD)

  • The International Bank for Reconstruction and Development (IBRD) is the oldest World Bank Institution, it was established in 1945. 
  • It lends money to the developing and underdeveloped countries at a very low interest rate. 
  • Area of focus for providing loans- agriculture, irrigation, urban development, healthcare, family welfare, dairy development, etc. 

International Development Agency (IDA)

  • It is also known as soft window of the World Bank, it was established in 1960. 
  • Its basic aim is to give infrastructural support to the member countries. 
  • It provides long-term interest free loans for the development of economic services. 
  • Its loans are known as Credits. 
  • The term World Bank generally refers to just the IBRD and IDA, whereas the term World Bank Group is used to refer to all five institutions. 

International Finance Corporation (IFC)

  • It is also known as the Private arm of the World Bank, it was established in 1956. 
  • It lends money to private sector companies of its member nations with commercial interest(but comparatively low). 
  • It finances and provides advice for private-public projects in partnership with private investors. 
  • It invests only when it can make a special contribution that complements the role of market investors as a foreign financial investor(FFI). 

Multilateral Investment Guarantee Agency (MIGA)

  • It was established in 1988. 
  • It encourages foreign investment in developing countries by offering insurance to foreign private investors against loss caused by non-commercial political risks. 

International Centre for Settlement of Investment Disputes (ICSID)

  • It was established in 1966. 
  • It is an investment dispute settlement body whose decisions are binding on the parties. 
  • It was set up under the 1966 'Convention on the Settlement of Investment Disputes between States and National of other States. 
  • It settles the investment disputes between the foreign companies and the host countries where the investment have been done.

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