Max Business

The International Bank for Reconstruction and Development was established at the international Economic Conference held at Bretton Woods in July 1944. It headquarter is situated in Washington D.C. (U.S.A.). The bank is a specialized agency for international monetary cooperation. The main objective of the bank is to assists in the economic development of the member countries and to help raise the standard of development countries by channelsing financial resources from development countries to developing countries. To assists in the reconstruction and development of less developed countries by facilitating investment for productive purposes. To promote private foreign investment by means of guarantees or participation and investment made by private investors. To promote long term balanced growth of international trade by assisting in raising productivity the standard of living and improving conditions of labor in the developing countries.

Development banks differ from commercial banks in many respects. Commercial banks provide credit for short term. They focus on the working capital needs of trade and industry. On the other hand, development banks provide finance for medium and long term. They focus on the fixed capital needs of industry and trade. They provide fiancé for expansion, diversification and modernization of business firms. Commercial banks are oriented towards security whereas development banks are oriented towards projected. Development banks give preference to development of new entrepreneurs and promotion of balanced regional development. In fact development banks were established because commercial banks and other financial intermediaries could not meet the needs of industry.