Multilateral Institutions Division
Poverty Reduction Growth Facility:
- For financing the Fund's concessional lending to Low-Income Countries (LICs) in the wake of the global financial crisis, on July 23rd, 2009, the IMF's Executive Board approved far-reaching reforms of the concessional lending facilities for low-income countries (LICs), creating a new architecture of facilities that is more flexible and tailored to the increasing diversity of LICs and their needs. The Executive Board approved a new concessional financing framework, under the reform package, under which a new Poverty Reduction and Growth Trust (PRGT) would replace the PRGF-ESF Trust. Separate loan and subsidy accounts would be instituted under the PRGT .These reforms became effective and operational on January 7, 2010, when all lenders and subsidy contributors to the PRGF-ESF Trust provided their consent.
- To meet projected demand for concessional financing through 2014, it was estimated that loan resources of SDR 11.3 billion (US$17 billion) and subsidy resources of SDR 2.5 billion in end-2008 net present value terms (or about US$4.7 billion in cash terms) would be needed. Given the available resources, additional loan resources of SDR 10.8 billion (US$16 billion) and new subsidy resources of SDR 1.5 billion (US$2.8 billion) would need to be mobilized. It is envisaged that, as in the past, the required additional loan resources will be mobilized through bilateral contributions. Most of the needed subsidy resources, however, will come from the IMF's internal resources-including the use of resources linked to the limited sales of gold approved by the Executive Board on September 18, 2009,with additional bilateral contributions of SDR 0.2 - 0.4 billion being sought to complete the financing package. It is expected that these measures will boost the resources available to LICs to SDR 11.3 billion (US$17 billion). The reform also provides exceptional interest relief (i.e., zero interest payments on concessional loans through end-2011) and permanently higher concessionality.
- As of December 31st 2011, India made a bilateral commitment under the PRGF-ESF Trust Subsidy Account of 11.7 million SDRs.
Emergency Natural Disaster Assistance (ENDA):
- The Executive Board of the IMF, on 21.1.2005, has approved opening
of a sub-account by expanding the scope of their administered account
for Emergency Post Conflict Assistance (EPCA) to subsidize the rate
of charge on emergency purchases in cases of Emergency Natural Disaster
Assistance (ENDA) to PRGF eligible member countries. IMF has targeted
resource mobilization through grant contributions by members to
be in the range of SDR 45 to 60 million. These grant contribution
will be used by IMF to subsidize the rate of charge to 0.5% per
annum on emergency natural disaster assistance, at the same rate
as is being charged by IMF for loans under PGRF - lending facility
for low income countries.
- India had originally agreed (in March 15, 2005), to contribute
up to SDR's 1.5 million over the next five years to support the
Fund's efforts to Emergency Natural Disaster Assistance (ENDA) for
the PRGF eligible member countries. Accordingly, India paid an amount
of Rs. 1,86,07,305 (i.e. equivalent to SDR 300000) towards India's
first annual contribution to ENDA facility of IMF in January 2008.
Subsequently, on receipt of request from the IMF, the matter has
been reconsidered and accordingly India made the payment of remaining
committed amount of SDR 1.2 million in two instalments of SDR 600,000
each by December 2009. In view of this, India paid an amount of
Rs. 4,42,08,665 (i.e. equivalent to SDR 600000 at the rate of Re
1=SDR 0.013752) towards India's second contribution to Emergency
Natural Disaster Assistance Facility of IMF in February 2010.
Heavily Indebted Poor Countries (HIPC / Multilateral Debt Relief Initiative (MDRI)):
- The Multilateral Debt Relief Initiative (MDRI) provides for 100
percent relief on eligible debt from three multilateral institutions,
viz. the IMF, the International Development Association (IDA) of
the World Bank, and the African Development Fund (AfDF) - to a group
of low-income countries. In June 2005, the Group of 8 (G-8) major
industrial countries proposed that three multilateral institutions-the
IMF, the International Development Association (IDA) of the World
Bank, and the African Development Fund (AfDF) - cancel 100 percent
of their debt claims on countries that have reached, or will eventually
reach, the completion point under the IMF-World Bank Heavily Indebted
Poor Countries (HIPC) Initiative. The HIPC Initiative entailed coordinated
action by multilateral organizations and governments to reduce to
sustainable levels the external debt burdens of the most heavily
indebted poor countries. The initiative is intended to help them
advance toward the United Nations' Millennium Development Goals
(MDGs), which are focused on halving poverty by 2015. At the IMF,
it was agreed that all countries with per-capita income of US $
380 a year or less (HIPCs and non-HIPCs) will receive MDRI debt
relief financed by the IMF's own resources. HIPCs with per capita
income above that threshold will receive MDRI relief from bilateral
contributions administered by the IMF. India endorsed Multilateral
Debt Relief Initiative (MDRI) in September 2005. Under the HIPC
initiative, India has given debt relief to the tune of Rs. 120.08
crores to seven HIPCs (viz. Guyana, Mozambique, Nicaragua, Tanzania,
Uganda, Zambia and Ghana).
Article IV Consultations:
- Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year, to review the economic status of the member countries. Article IV consultations are generally held in two phases. During this exercise the IMF mission holds discussions with the RBI and various line Ministries / Departments of Central Government. The Article IV Consultations are concluded with a meeting of IMF Executive Board at Washington DC which discusses the Article IV Report. The last round of annual Article IV Consultations with the IMF Staff were held during January 5-19th 2012.
Regional Training Centre:
For comments / clarifications / feedback on this section, please contact Shri Sanjeev Kaushik, Director at Email sanjeev[dot]kaushik[at]nic[dot]in.
- In July 2004, the Government of India approved IMF's proposal
for setting up a joint training program at the National Institute
of Bank Management, Pune. The Training Program will provide policy
oriented training in economics and related operational fields to
Indian officials and officials of countries in South Asia and East
Africa. The first training program was held during July 2006. RBI
is the nodal body to co-ordinate the training program with the IMF.
The Institute caters to participants from regional countries, especially
in the SAARC region. Australia is providing financial assistance
for the Institute.
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