1. International liquidity International liquidity define as the aggregate stock which is acceptable by international organization such as IMF,WTO.WB when any country has deficit to pay his due in balance of payment, than there are some rights to borrow money from IMF as a loan so that meat his due. Such reserve include official gold holdings is convertible foreign currency and special rights drawings (SDR) 1= 100.17

2. BROAD DEFINATION INCLUDING INTERNATIONAL BORROWINGS COMMERCIAL CREDIT OPERATION India's current quota in the IMF is SDR (Special Drawing Rights) 5,821.5 million, making it the 13th largest quota holding country at IMF and giving it shareholdings of 2.44%. However, based on voting share, India (together with its constituency countries Viz.

3. QUOTA A member country's quota determines its maximum financial commitment to theIMF, its voting power, and has a bearing on its access to IMF financing. When a country joins the IMF, it is assigned an initial quota in the same range as the quotasof existing members of broadly comparable economic size and characteristics.

4. FACT Suppose, if a member country has less currency with the fund than its quota, the difference is called “Reserve Tranche”. It can draw up to 25 per cent on its reserve tranche automatically upon representation to the fund for its balance of payments needs. No interest will be charged on this drawings within a period of 3 to 5 years.

5. FACT Further, a member can withdraw from balance of quota in four installments up to sixty eight per cent of its quota from credit tranches annually. For drawing this amount members will have to satisfy the fund of adopting a viable programme to ensure financial stability. To meet the severe balance of payments problems, the fund now has made provisions to draw up to 300 per cent of their New-Quota. Since 1960 the fund has created survival new credit facilities for its members and under the facility loan can be taken for a longer period.

6. Buffer Stock Financing Facility (B.S.F.F.): This facility was created in 1969 for financing commodity buffer stock by member countries. The facility is equivalent to 30% of the borrowing member’s quota.

7. The Extended Fund Facility (E.F.F.): This was created in 1974. The fund provides credit to member countries to meet their balance of payments deficits for longer period. E.E.F. provides credit (loans) up to 100% of the member’s quota for 10 years.

8. The Supplementary Financing Facility (S.F.F.): This was established in 1977. This was created to provide supplementary financing under extended arrangements to member countries to meet serious balance of payments deficits. This facility was extended to “Low-income developing member countries” of the fund.

9. Enhanced Structural Adjustment Facility (E.SA.F.)-1987: This was created in December 1987 with S.D.R. 6 billion of resources for the medium- term financing needs of low income countries. In this the assistance can be given up to 190% of quota over three years programme period.

10. Compensatory and Contingency Financing Facility (C.C.F.F.): This was created in August 1988 to provide timely compensation for temporary shortfalls in “Cereal Import Costs” due to factors beyond the control of the member and contingency financing to help a member to maintain the momentum of fund. These fund schemes have been criticised by many countries for favouring the rich and prosperous nations. This has been called an inequitable scheme. Which had make unfair distribution of International Liability. Here the allocation of S.D.Rs. to Developing Countries in very Low as compared to their needs. Low allocation of S.D.Rs. reduces the borrowing capacity of such countries.

11. The Asian Development Bank: The Asian Development Bank is the outcome of the Ministerial Conference held at Wellington in March 1965. Where Economic experts submitted report to the U.N. Economic Commission for Asia and Far East (E.C.A.F.E.). In January 1966, 33 countries signed the charter and the Asian Development Bank was set up on 19th December 1966. The headquarters of this Bank is at Manila in the Philippines.

12. AIM The aim for the establishment of Asian Development Bank was to supplement the work of the World Bank in Asia. Objectives of the Bank:

13. DETAILS The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, [3] which is headquartered in the Ortigas Center located in the city of Mandaluyong, Metro Manila, Philippines. The company also maintains 31 field offices around the world [4] to promote social and economic development in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non- regional developed countries. [5] From 31 members at its establishment, ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside. The ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members' capital subscriptions. ADB releases an annual report that summarizes its operations, budget and other materials for review by the public. [6] The ADB-Japan Scholarship Program (ADB-JSP) enrolls about 150 students annually in academic institutions located in 10 countries within the Region. Upon completion of their study programs, scholars are expected to contribute to the economic and social development of their home countries. [7] ADB is an official United Nations Observer. [8]regional development bank [3]Ortigas CenterMandaluyongMetro ManilaPhilippines [4]economic developmentUnited Nations Economic and Social Commission for Asia and the Pacificdeveloped countries [5]World Bank [6] [7]United Nations [8] As of 31 December 2016, Japan and United States hold the largest proportion of shares at 15.607%. China holds 6.444%, India holds 6.331%, and Australia holds 5.786%

14. OBJEACTIVE 1. To promote public and private investment for economic development in Economic Commission for Asia and Far East (E.C.A.F.E.) region. 2. To utilise the available resources for the financing of economic development, to achieve this, it gives priority to these regional and sub- regional and national projects and programmes which contribute more effectively to the harmonious growth of the entire region especially of the smaller and less developed members of the region. 3. To help the regional members in the co-ordination of their plans and policies for the economic development to enable them to achieve a better utilisation of their resources. 4. To provide technical assistance for the preparation, financing and implementation of projects and programmes for economic development including the formulation of specific projects. 5. To co-operate with the United Nations and its organs and subsidiaries including in particular, the C.E.A.F.E. and other international institutions and organisations and national entities in the investment of development funds in the region. 6. To undertake all such activities and provide such services which may fulfill the above objectives.

15. Besides the above following can become the member of the Bank 1. Members of the Economic Commission for Asia and Far East (E.C.A.F.E.). 2. Associate members of E.C.A.F.E. 3. Other countries of the E.C.A.F.E. region which are the members of the United Nations. 4. Developed countries outside the ECAFE region which are members of the United Nation.

16. Administration and Management of the Bank: (i) A President, (ii) Vice-president and a Board of Governors along-with an administrative staff. (i) The President is the administrative head of the Bank. The Vice-president performs the duties of the President in his absence. (ii) Each member country normally nominates his Governor and an Alternate Governor to the Board of Governors. At least one meeting of the Board of Governors is essential to be held every year. (iii) The Board of Governors takes all decisions concerning the Bank, passes the annual budget and presents the accounts of the Bank to the Board of Governors for approval.

17. Following are the important work of the Bank which only the Board of Governors can perform and they are: (a) Entry of new members in the Bank; (b) Change if any in the authorised capital of the Bank; (c) Election procedure of the President and related administrators; (d) Amendments in the Charter of the Bank are to be made.

18. Functions of the Bank: 1. Financial Assistance to Underdeveloped Member Countries: The Bank provides financial assistance to under developed member countries in the form of grants and loans. The loan is given out of its Ordinary Funds Reserve and Special Funds Reserve. Loans are given for development projects or specific projects. All direct loans are “Hard Loans” for a period of 20 years repayable over 15 years with a five-year as grace period. The interest rate is determined according to the Lending Rate System for U.S. dollar loans. The Bank gives three types of loans: (a) Project loans, (b) Sector loans, and (c) Programme loans. (a) Project Loans are given for specific projects. (b) Sector Loans are given to a number of related projects in a given sector.

19. (c) Programme Loans cover more than one sector and relate to the implementation of a policy or programme for bringing about certain changes. At the time of giving loans the Bank considers their economic, technical and financial feasibility, their effects on the general activity of the concerned country and the capacity to repay the loans.

20. In the end it can be said that the Asian Development Bank (A.D.B.) allows the following types of loans: To develop finance institutions on the guarantee of the government; b. It provides help to medium enterprises on the government’s guarantee; c. It helps private enterprises in the form of equity and loans without government guarantee; d. It helps and strengthen the financial institutions and capital market; e. Helps Public Sector enterprises for privatisation without government guarantee.

21. ASSIATANCE Technical Assistance to Member Countries: This assistance is given in the form of grants of loans or both. This help is given to implement specific national or regional development of projects. Further help is given in the form of the creation of new institutions on a national and regional basis. The Bank also provides advisory service under its technical assistance programme. It sends its own experts and sometimes hires consultants for re-organising institutions for projects implementation in member countries.

22. It Conducts Surveys and Research to Prepare Future Policies: It does surveys and research to highlight the achievements, prospects etc. to the economic development of the member countries and to solve the problems if any.

23. The Bank does Work on Poverty Reduction, Social Activities and Conserva­tion of National Environment: It now pays more attention to human resource development in order to develop skilled and capable manpower in developing member countries. Progress: The Bank has been providing assistance to developing member countries in the field of agriculture and agro- based industries, energy, industry and non-fuel minerals, transport and communication, water supply, education, health and population planning. In spite of above mentioned help extended by the bank it suffers from a number of problems.

24. PROBLEMS Problems: (1) Financial Problem: The financial resources of the Bank are limited because the regional member countries are mostly poor. The developed member countries like—Japan, Britain, America and others are not prepared to contribute more. (2) Negative Transfers to the Bank: There has been negative transfers to the bank from countries like—Fiji, Malaysia and Philippines. (3) Loan Sanctions have been increased but less Disbursements: No doubt, loan sanctions have increased but their disbursements have been less. The bank should undertake such measures where by loan absorption capacity of the recipients may increase. Despite these problems and weaknesses the Asian Development Bank’s contribution to the economic development of the developing member countries of the region has been creditable.