The IBRD (International Bank for Reconstruction and Development)

The IBRD is the International Bank for Reconstruction and Development. Its Articles of Agreement came out of a wartime conference. They were ratified on 27 December 1945, and the World Bank opened its doors on 25 June 1946.

Who met at Bretton Woods in 1944?

Delegates from forty-four nations met at the Mount Washington Hotel in Bretton Woods, New Hampshire. The conference convened on 1 July 1944. The Library of Congress says the delegates met from 1 to 22 July 1944.

The formal name was the United Nations Monetary and Financial Conference. It had 730 delegates. Henry Morgenthau, the US Treasury Secretary, served as conference president. John Maynard Keynes of the UK delegation led Commission II. That commission dealt with the proposal for a bank for reconstruction and development.

India was among the active participants. So were Mexico, Chile, Brazil, Belgium, the Netherlands, Czechoslovakia, Poland, Canada, China and the Soviet Union.

What did the conference produce?

The conference produced the Articles of Agreement for two institutions. They were the IBRD and the International Monetary Fund (IMF). By 22 July 1944 the delegates had signed the Final Act. It included charters setting out the goals and mechanisms of both institutions.

Much of the discussion centred on two things. One was the Bank’s dual purposes of reconstruction and development. The other was its capital structure.

When did the IBRD actually come into existence?

The World Bank archive says the Bank did not technically exist during the conference or just after it.

The IBRD Articles of Agreement were ratified on 27 December 1945. The Bank’s own archive says representatives from twenty-one countries met in Washington DC for this step and became its first members. Other records count more signatories, so treat the number as the archive’s wording.

The Library of Congress says the conference resulted in the creation of the IMF and the IBRD. It then says both formally came into existence on that date. It adds that the World Bank opened its doors on 25 June 1946.

When did it make its first loan?

The World Bank approved its first loan on 9 May 1947. The borrower was Credit National of France. The loan was $250 million and was meant for reconstruction. It was to pay for equipment, coal, petroleum and raw materials.

The timeline calls it one of the largest loans in real terms made by the World Bank. The borrower, amount and goods come from that one timeline page. The Library of Congress confirms only the year, 1947.

Two documents answer this. One is the Articles of Agreement, which fix the Bank’s purposes. The other is the Bank’s own description of its work today.

What do the Articles say the Bank is for?

Article I lists five purposes. The text used here is as amended effective 27 June 2012.

• Reconstruction and development. The Bank assists the reconstruction and development of members’ territories by facilitating investment of capital for productive purposes. That includes restoring economies destroyed or disrupted by war. It also includes developing productive facilities and resources in less developed countries.
• Private investment. The Bank promotes private foreign investment through guarantees or participations in loans. When private capital is not available on reasonable terms, it supplements that investment with finance for productive purposes.
• Trade and payments. The Bank promotes long-range balanced growth of international trade. It also promotes balance of payments equilibrium by encouraging international investment.
• Loan arrangement. The Bank arranges the loans it makes or guarantees, in relation to international loans through other channels. The aim is that the more useful and urgent projects, large and small alike, are dealt with first.
• Business conditions. The Bank conducts its operations with due regard to the effect of international investment on business conditions in members’ territories. In the immediate postwar years, it was to help bring about a smooth change from a wartime to a peacetime economy.

The Article ends with a rule. The Bank shall be guided in all its decisions by these purposes.

What does the IBRD do today?

The IBRD calls itself a global development cooperative owned by 189 member countries. It describes itself as the largest development bank in the world. The World Bank Group Annual Report 2026 calls it the largest multilateral development bank in the world.

It provides loans, guarantees, risk management products and advisory services. Its clients are mainly middle-income and creditworthy low-income countries. On 30 June 2026, 86 member countries were eligible to borrow from the IBRD.

The IBRD page carries no date. It says middle-income countries represent more than 60% of the portfolio. It also says the Bank gives special emphasis to lower-middle-income countries as they graduate from IDA to become IBRD clients.

How does the IBRD relate to the World Bank and IDA?

The Bank’s page says it was created in 1944 to help Europe rebuild after World War II. It joins with IDA, the fund for the poorest countries, to form the World Bank. The financial statements say the World Bank consists of IBRD and IDA.

The IBRD is one of five institutions of the World Bank Group. Each institution is legally and financially independent, with separate assets and liabilities. The IBRD is not liable for the obligations of the other institutions.

Who is behind IBRD loans?

The financial statements say all IBRD loans are made to, or guaranteed by, member countries. They add that the IBRD may also make loans to IFC without any guarantee.

IFC is a different case. Its FY2025 statement, dated 30 June 2025, says that, unlike most other development institutions, IFC does not accept host government guarantees of repayment.

Where is the Bank based?

The footer of the Article I page gives the Bank’s address as 1818 H Street NW, Washington DC. Article V says the principal office of the Bank shall be located in the territory of the member holding the greatest number of shares. At 30 June 2026 the United States was the largest shareholder.

The IBRD is owned by its members. Each member holds shares. This card explains who may join and what a share means.

What is the condition for joining?

Article II sets the rule. The original members were those members of the IMF that accepted membership in the Bank. Membership is open to other members of the Fund, on terms the Bank prescribes. This lesson reads that to mean a country needs IMF membership to join.

How many members does the IBRD have?

The IBRD is owned by its 189 member countries, as of 30 June 2026. The Bank’s page gives the same number.

What is a share?

The Articles text sets the authorised capital stock at $10,000,000,000. It is in United States dollars of the weight and fineness in effect on 1 July 1944. The text divides it into 100,000 shares with a par value of $100,000 each. Shares are available for subscription only by members. Each member shall subscribe shares of the capital stock.

At 30 June 2026 the financial statements show 2,783,873 authorised shares. Of these, 2,756,229 shares were subscribed. The sources opened for this lesson do not explain why the share numbers differ.

What if the Bank needs more capital?

The capital stock may be increased by a three-fourths majority of the total voting power. The Board of Governors cannot hand this power to the Executive Directors. The power to increase or decrease the capital stock stays with the Governors.

How much can a member lose?

Liability on shares is limited to the unpaid portion of the issue price of the shares. This limit comes from Article II, Section 6.

Subscribed capital has two parts. At 30 June 2026, 7% was paid in and 93% was uncalled, according to the financial statements.

How big is the capital?

At 30 June 2026 the IBRD’s total subscribed capital was $332,497 million. Of this, $23,644 million was paid-in capital, or 7%. The other $308,853 million, or 93%, was uncalled.

Total equity at 30 June 2026 was $74,353 million.

What do the Articles say about calls?

Each member’s subscription is divided into two parts. The first is 20%, which is paid or subject to call as needed by the Bank for its operations. The second is the remaining 80%. It is subject to call only when required to meet obligations of the Bank under Article IV, Sections 1(a)(ii) and (iii).

The Articles give a 20% and 80% split. The 7% and 93% figures come from the financial statements at 30 June 2026. The sources opened for this lesson do not reconcile the two sets of numbers. Article II also says two percent of the price of each share is payable in gold or US dollars. The other eighteen percent of the first twenty percent is paid in the member’s own currency when calls are made.

The financial statements put the standard uncalled amount in plain terms. It may be called only when required to meet the IBRD’s obligations for funds borrowed or loans guaranteed. It is not available for use by the IBRD when making loans.

There is one newer form. In October 2024 the Board approved Enhanced Callable Capital. Shareholders can convert part of their callable capital into it. It can be called earlier if the IBRD faces an imminent threat of a rating downgrade. In January 2026 one member converted $50 million. The statements count it as part of usable equity that supports lending.

Has the IBRD ever called its capital?

No call has ever been made on the IBRD’s capital. The statements add that members’ obligations to pay on a call are independent of one another. Calls must be uniform.

Of the uncalled amount, $42,855 million was restricted by resolutions of the Board of Governors. These resolutions record an understanding that the amount will not be called for lending or administrative purposes. They are not legally binding on future Boards of Governors.

Who holds the largest share of uncalled capital?

The United States is the largest shareholder. It also has the largest share of uncalled capital, at $52,048 million. That is 17% of total uncalled capital.

What was the 2018 capital package?

In October 2018 the Governors approved a General Capital Increase and a Selective Capital Increase. The increases were expected to add up to $60.1 billion of subscribed capital. Of that, $7.5 billion would be paid-in and $52.6 billion callable.

The subscription periods ended on 1 October 2025. On 8 January 2026 the Governors approved a reallocation of unsubscribed shares. Members that had not completed their subscription could subscribe by 16 April 2026. By that date, cumulative payments of $7.2 billion had been received against the $7.5 billion expected.

This card follows the money in, and then out.

How does the IBRD raise funds?

The IBRD raises most of its funds in the world’s financial markets. Its loans are largely financed through its equity and from borrowings raised in the capital markets and from shareholders.

The IBRD page is undated. It says the IBRD has held a triple-A rating since 1959 and that this lets it borrow at low cost. The June 2026 financial statements say it is rated triple-A by the major rating agencies. At 30 June 2026 its borrowings stood at $309,245 million.

The Annual Report 2026 gives two more figures. The IBRD has raised over $1 trillion from capital markets since its first bond in 1947. In fiscal 2026 it raised nearly $50 billion through Sustainable Development Bonds.

How does the IBRD earn income?

The IBRD earns income every year from the return on its equity and from the small margin it makes on lending. This income pays World Bank operating expenses. It also goes into reserves and funds an annual transfer to IDA.

The Annual Report says the IBRD is a cooperative. It does not seek to maximise profit. It aims to earn enough income to keep its long-term financial capacity.

In FY2026 the net income was $2,060 million. On 6 August 2026 the Board approved $1,064 million for the General Reserve. It recommended $750 million for IDA to the Board of Governors.

How much did the IBRD lend in FY2026?

The fiscal year ended on 30 June 2026. The Annual Report gives new IBRD lending commitments of $50.2 billion for 147 operations. Of these operations, 13 were IBRD and IDA blended operations.

The financial statements give net commitments of $50,177 million in Table 12. For FY2025 the table gives $40,885 million. The statements call the rise an increase of $9.3 billion, or 23%.

Gross disbursements in FY2026 were $26,955 million. Net loans outstanding at 30 June 2026 were $287,659 million.

Which regions got the commitments?

Europe and Central Asia had the largest share of FY2026 net commitments, with 30%. Latin America and the Caribbean followed with 26%. South Asia had 12%.

The statements note a regional change from 1 July 2025. Afghanistan and Pakistan moved from the South Asia region to the Middle East, North Africa, Afghanistan and Pakistan region. Earlier figures were reclassified to match.

Votes in the IBRD are not one per country. They depend on shares. A small block of votes is shared equally.

What makes up a member’s voting power?

Article V gives the rule. A member’s voting power equals the sum of its basic votes and its share votes. Basic votes come from an equal distribution among all members of 5.55 percent of the total voting power. Share votes come from one vote for each share held.

Unless the Articles say otherwise, all matters are decided by a majority of the votes cast.

Who holds the most votes?

At 30 June 2026 the total voting power was 2,918,202 votes. The top six members held 40% of it. The United States held the largest share, with 15.98%.

What do basic votes change?

Article V gives each member an equal distribution of basic votes. The statement of subscriptions shows two examples. Afghanistan held 506 shares and 1,363 votes. Albania held 1,355 shares and 2,212 votes.

In both rows the votes exceed the shares by 857. By subtraction, that gap is each member’s basic votes.

Which decisions need more than a majority?

Some decisions need a higher bar. These two examples come from the Articles.

• Three-fourths of the voting power: an increase in the capital stock.
• Four-fifths of the voting power: the Governors may raise the number of directors this way when new members join.

India is a shareholder in the IBRD. The financial statements give exact numbers for its holding.

How big is India’s stake?

At 30 June 2026 India held 85,175 shares. That is 3.09% of all subscribed shares. India’s total subscription was $10,275.1 million. Of this, $738.0 million was paid in. The remaining $9,537.1 million was subject to call.

India had 86,032 votes. That is 2.95% of the total voting power of 2,918,202 votes.

Where does India rank by votes?

The top six names are the United States, Japan, China, Germany, France and the United Kingdom. The UK and France are tied at 3.75%. India’s 2.95% comes after that.

The next members in the same table are Russia with 2.74%, Saudi Arabia with 2.67%, Italy with 2.64% and Canada with 2.44%. So India is seventh by votes at 30 June 2026. This ranking is our reading of the statement’s rows.

France, also at 3.75%, is not in the table.

Did India take part in 1944?

Yes. The World Bank archive lists India among the active participants at Bretton Woods in 1944.

How does India’s vote relate to its shares?

India’s votes exceed its shares by 857. That is the same gap as in the Afghanistan and Albania rows on the previous card. So India’s 86,032 votes are 85,175 share votes plus 857 basic votes, by subtraction.

The Board of Governors holds all the powers of the Bank. It can delegate most of them to the Executive Directors. The Executive Directors handle the general operations.

What does the Board of Governors do?

All the powers of the Bank are vested in the Board of Governors. Each member appoints one governor and one alternate. Each serves for five years and may be reappointed.

The Board of Governors may delegate powers to the Executive Directors. Seven powers cannot be delegated.

• Admit new members and set the conditions of their admission.
• Increase or decrease the capital stock.
• Suspend a member.
• Decide appeals from interpretations of the Agreement given by the Executive Directors.
• Make arrangements to cooperate with other international organizations, other than informal, temporary and administrative ones.
• Decide to suspend the Bank’s operations permanently and distribute its assets.
• Determine the distribution of the net income of the Bank.

Who are the Executive Directors?

The Executive Directors are responsible for the general operations of the Bank. They function in continuous session at the principal office. Article V sets twelve Executive Directors. Five are appointed, one by each of the five members with the largest number of shares. Seven are elected by the other Governors.

The Governors may raise the number of directors by a four-fifths majority of the total voting power when new members join. As read on 8 October 2026, the Board page lists 25 Executive Directors. The five largest shareholders still appoint one each, and the remaining members elect the others. Regular elections are held every two years at the Annual Meetings.

What does the President do?

The Executive Directors select the President. The President chairs the Executive Directors. The President has no vote except a deciding vote in case of an equal division. The President is also chief of the operating staff.

The Annual Report 2026 names Ajay Banga as President of the World Bank Group and Chairman of the Board of Executive Directors.

Can the shareholding change?

Yes, through capital increases. The Governors can increase the capital stock by a three-fourths majority. Card 4 describes the 2018 General and Selective Capital Increases.

The financial statements show subscribed shares of 2,678,098 at 30 June 2024 and 2,756,229 at 30 June 2026. The table labels the additions as GCI/SCI.

Which question was it?

How do the sources check each statement?

• Statement I is supported. The IBRD provides loans, guarantees, risk management products and advisory services to middle-income and creditworthy low-income countries.
• Statement II is not supported. The IBRD page says IBRD and IDA work closely with all World Bank Group institutions and with the public and private sectors. The word “single-handedly” does not fit that description.
• Statement III is supported on the IBRD page’s wording. The page says the Bank was created in 1944 to help Europe rebuild after World War II. Article I also names the restoration of economies destroyed or disrupted by war. The archive says the IBRD Articles were ratified on 27 December 1945. So the sources give both 1944 and 1945.

The sources support statements I and III and do not support statement II. By elimination, that leaves option (c), I and III only. The practice section below carries this question.