Context:
The IFC, World Bank’s private lending arm has withdrawn from funding for waste incineration projects in Gujarat.
International Finance Corporation:
- Founded in 1956 with Washington, DC as its headquarters.
- A member of the World Bank Group.
- Mandate – Advance economic development and improve the lives of people by encouraging the growth of the private sector in developing countries.
- India is a Member
- Largest global development institution focused on the private sector in emerging markets.
- Functions –
- Investing in companies through loans, equity investments, debt securities and guarantees.
- Mobilizing capital from other lenders and investors through loan participations, parallel loans and other means.
- Advising businesses and governments to encourage private investment and improve the investment climate.
- Governance – Owned and governed by its member countries.
- It is a corporation whose shareholders are member governments that provide paid-in capital and have the right to vote on its matters.
- The President of the World Bank Group is also the President of the IFC.
WB Group (Global partnership of 5 institutions):
- IBRD (The International Bank for Reconstruction and Development) – It provides loans, credits and grants.
- IDA (The International Development Association) – It provides low or no-interest loans to low-income countries.
- IBRD and IDA form the World Bank
- International Finance Corporation (IFC)
- Multilateral Guarantee Agency (MIGA) – It insures lenders and investors against political risk such as war.
- International Centre for the Settlement of Investment Disputes (ICSID) – It settles investment-disputes between investors and countries.
- India is not a part of ICSID
Read more about World Bank
Source: DTE
Previous Year Question
Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR?
[UPSC Civil Services Exam – 2016 Prelims]
(a) Rouble
(b) Rand
(c) Indian Rupee
(d) Renminbi
Answer: (d)