At the initial stage, provision was made to include all members of IMF as members of World Bank. Accordingly, those countries who were members of IMF as on 31st December, 1945 became the founder members of the Bank. Later on, the membership norms of the Bank were relaxed. Now any country can become the member of the Bank if 75 per cent of the existing members support its application. There were 151 members of the Bank as on October, 1988. Any member can also resign from its membership. Similarly, the Bank can also suspend a member if its violates the rules of the Bank.
Capital of the World Bank
Initially, the authorized capital of the World Bank was to the tune of $ 10,000 million, which was divided into 1,00,000 shares of $ 1,00,000 each. All these shares were made available to member countries only. As per the system of the Bank, out of each share.
(a) 2 per cent in payable in gold or U.S. dollars;
(b) 18 per cent of the subscription is to be paid in terms of member’s own currency;
(c) The remaining 80 per cent of the subscription is not immediately collected from the members but can be called up by the Bank as a Callabh fund whenever it requires to meet its obligation. Thus it is observed that only 20 per cent of the total capital is called by the Bank and the same is available for its lending purposes.
The capital of the World Bank has also been increased time to time with the consent of its members. After the admission of new members, the authorized capital of the Bank has been increased to $ 171 billion. In its annual meeting held in September 1983, the World Bank decided to go in for a selective capital increase of 8.4 billion dollars and accordingly the share holding of different member countries were suitably adjusted.
Management or Organization of World Bank
The organization of the World Bank is consisting of the Board of Governors, the Board of Executive Directors, the Loan Committee, the Advisory Committee, the President and other members of the staff. The management of the Bank is rested on the Board of Governors, the Executive Directors and the President.
Board of Governors
All powers of the Bank are vested with the Board of Governors. Being a general body of the Bank, the Board of Governors of the Bank is consisting of one Governor (generally the Finance Minister) and one alternate Governor (generally the Governor of the Central Bank) appointed by each member country for a term of five years. Each Governor has its voting power in relation to its financial contribution to the capital of the Bank. Normally, the Board is required to meet at least once in a year so as to chalk out the general policy of the Bank.
The Board of Executive Directors are in charge of the general operations of the Bank. It is consisting of 21 Executive Directors, six of them are appointed by the six largest shareholders, namely, the U.S.A., the U.K., Germany, France, Japan and India. The remaining 15 members are elected by the remaining member countries.
Each Executive Director is holding voting power in proportion to their share of capital. This Board regularly meets once a month to carry on its routine works of the Bank. It also places its audited accounts, annual budget and Annual Report of the Bank of the Board of Governors every year in its annual meeting.
The President of the Bank is appointed by the Board of Executive Directors. The President works as the chief of the operating staff and is also responsible for the conduct of normal day-to-day business of the Bank. He is also subjected to the direction of the Executive Directors in respect of policy matters.
The Bank usually performs its functions with the help of two committees, i.e., Advisory Committee and the Loan Committee. The Advisory Committee is consisting of seven experts appointed by the Board of Governors. The Loan Committee is constituted by the Executive Directors and also consulted by the Bank for extending any loan to the member countries to examine the appropriateness of a loan.