Multilateral Development Banks

Multilateral Development Banks

Why in news ?

Recently, a G20 expert panel has recommended that Multilateral Development Banks (MDBs), should shift their approach from funding individual projects to focusing on sector-specific programs and long-term transformation plans as outlined by national governments.

What are Multilateral Development Banks?

  • MDBs are international institutions comprising developed and developing countries.
  • They offer financing and technical assistance for various projects in areas like transportation, energy, urban infrastructure, and waste management.
  • Developed countries contribute to MDB lending, while developing nations typically borrow from them for development projects.
  • MDBs have been instrumental in supporting the development of both low-income and middle-income countries (LICs and MICs) by addressing issues such as poverty reduction, infrastructure development, human capital formation, etc.

Multilateral Development Banks

Need for reforms within MDBs

  • To deal with the climate crisis: A reformed MDB ecosystem can equip stakeholders to better deal with global challenges in effective ways.
  • Private sector engagement: The existing perception and practices of MDBs have adversely impacted their engagement with the private sector. MDBs are often seen as bureaucratic

and risk averse, which deters the private sector from being more involved in assisting with financing.

Role of MDBs in India’s Development:

  • The World Bank, has committed to lending worth $97.6 billion in India, including all active and closed projects.
  • The Asian Development Bank, has cumulatively committed to assistance worth $59.7 billion in India for project and technical assistance.
  • The Asian Infrastructure Investment Bank (AIIB), has approved financing worth $9.9 billion in India.


  • The World Bank Group is an international partnership comprising 189 countries and five constituent institutions that works towards eradicating poverty and creating prosperity. It traces its origin to the Bretton Woods Conference,1944.
  • The World Bank is the collective name for the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), two of five

international organizations owned by the World Bank Group.

  • Headquarters: Washington, D.C


  • AIIB is a multilateral development bank that provides financing for infrastructure projects in Asia.
  • The bank was established in 2016 and has 109 members.
  • Headquarters: Beijing, China


  • EIB is the European Union’s development bank and is owned by the EU Member States. It is one of the largest supranational lenders in the world.
  • The bank was established in 1958
  • Headquarters: Luxembourg


  • ADB is a regional development bank established in 1966 for Social and Economic Development. It has 68 members.
  • Headquarters: Manila, Philippines.

स्रोत – The Hindu

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