“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following?

1. Asian Development Bank
2. International Monetary Fund
3. United Nations Environment Programme Finance Initiative
4. World Bank

Explanation

Option (b) is correct

• IMF Lending Instruments: The IMF lends money to the economies in peril in the form of Special Drawing Rights (SDRs), which is a basket of five currencies — US dollar, Euro, Chinese Yuan, Japanese Yen b British Pound. It can be executed through loans, cash, bonds, or stock purchases. Lending is done through programs designed for specific purposes. According to the IMF, these include the standby arrangement, standby credit facility, extended fund facility, the extended credit facility, rapid financing instrument, rapid credit facility, flexible credit line, short-term liquidity line, the precaution and liquidity line, resilience and sustainability facility, staff monitored program, policy support instrument and policy coordination instrument.

Option (a) is incorrect

• The Asian Development Bank (ADB) is a financial institution established in 1966.
• It has its headquarters in Manila, Philippines. It was conceived in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in the Asia-Pacific region. It aims to make Asia and the Pacific prosperous, inclusive, resilient, & sustainable while tackling poverty.
• ADB promotes private sector development, gender empowerment, regional integration, etc.
• Functions: ADB assists its members and partners by providing loans, technical assistance and grants.
  • It focuses on projects that help promote private investments in the region that will have a significant development impact and lead to accelerated, sustainable, and inclusive growth.
  • Eighty per cent of ADB’s lending is concentrated in the public sector lending in five operational areas:
    1. Education
    2. Environment
    3. Regional Cooperation
    4. Finance sector development
    5. Private sector lending
• Membership
  • ADB has 68 members (originally 31).
  • 49 members are from Asia and the Pacific.
  • 19 members are from outside the Asia Pacific region.

• Contribution of member states and Voting
  • The ADB was modelled closely on the World Bank/IMF and has a similar weighted voting system where votes are distributed proportionately with members’ capital subscriptions.
• Contributions:
  • Japan and USA (15.7 % each)
  • China (6.4 %)
  • India (6.3 %)
• India is a founding member of ADB and the bank’s fourth-largest shareholder.
• ADB aligns its operations in the country to the government’s developing priorities.

Option (c) is incorrect

• United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 450 banks, insurers, and investors and over 100 supporting institutions – to help create a financial sector that serves people and planet while delivering positive impacts.

Option (d) is incorrect

• The World Bank is an international organisation (189 member countries) focused on providing financing, advice, and research to support the economic development of developing countries.

Answer: (b) International Monetary Fund; Difficulty Level: Medium