IDB Full Form: History, Members, Functions etc.

IDB Full Form: A multilateral development finance organisation emphasising Islamic finance for infrastructure development, where the IDB Full Form is Islamic Development Bank based in Jeddah, Saudi Arabia. There are 57 member states with voting rights, with Saudi Arabia being the most significant shareholder overall.

IDB Overview

This section briefly overviews the Islamic Development Bank (IDB). Let’s have a look.

History

With the backing of the then-King of Saudi Arabia, Faisal, it was established in 1973 by the Finance Ministers at the first Organization of the Islamic Conference (now known as the Organisation of Islamic Cooperation), and it officially started operating on April 3, 1975.

IDB increased its allowed capital to $150 billion on May 22, 2013, to better serve Muslims in member and non-member nations. Standard & Poor’s, Moody’s, and Fitch have assigned the Bank credit ratings of AAA. About a quarter of the bank’s paid-up capital is owned by Saudi Arabia. At the UN General Assembly, the IDB is an observer.

Members

The Bank has 57 countries as members as of this writing. The fundamental requirements for membership are that the prospective member country belongs to the Organization of Islamic Cooperation (OIC), contributes to the Bank’s capital, and is ready to accept any terms and conditions that the IDB Board of Governors may decide upon.

Major shareholders are listed below in order of paid-up capital:

1. Saudi Arabia (26.57%)
2. Algeria (10.66%)
3. Iran (9.32%)
4. Egypt (9.22%)
5. Turkey (8.41%)
6. United Arab Emirates (7.54%)
7. Kuwait (7.11%)
8. Pakistan (3.31%)
9. Libya (3.31%)
10. Indonesia (2.93%)

IDB Functions

IDB Group is involved in a variety of integrated and specialised activities, including:

1. Public and private sector project funding
2. Development aid for eradicating poverty;
3. Technical support for enhancing capacity;
4. Trade and economic cooperation among members;
5. Trade financing;
6. SME financing;
7. Resource mobilisation;
8. Investing directly in Islamic financial institutions with equity;
9. Coverage for investment and export credit through insurance and reinsurance;
10. Islamic banking and economics education and research.

Conclusion

The Islamic Development Bank (IDB) is one of the most important organizations helping its 57 member states build up their economies and facilities. It was started in 1975 with strong backing from Saudi Arabia and has grown into a major multilateral organization that promotes Islamic finance ideals. With a wide range of services, including project support, building up people’s skills, and working together on trade, the IDB continues to play a key role in promoting prosperity and cooperation among its member countries.

Frequently Asked Questions (FAQs)