Islamic Development Bank

The Islamic Development Bank is an international financial institution established in pursuance of the Declaration of Intent issued by the Conference of Finance Ministers of Muslim Countries held in Jeddah in Dhul Q’adah 1393H, corresponding to December 1973. The Inaugural Meeting of the Board of Governors took place in Rajab 1395H, corresponding to July 1975, and the Bank was formally opened on 15 Shawwal 1395H corresponding to 20 October 1975.

Purpose

The purpose of the Bank is to foster the economic development and social progress of member countries and Muslim communities individually as well as jointly in accordance with the principles of Shari’ah i.e., Islamic Law.

Purpose

The functions of the Bank are to participate in equity capital and grant loans for productive projects and enterprises besides providing financial assistance to member countries in other forms for economic and social development. The Bank is also required to establish and operate special funds for specific purposes including a fund for assistance to Muslim communities in non-member countries, in addition to setting up trust funds. The Bank is authorized to accept deposits and to mobilize financial resources through Shari’ah compatible modes. It is also charged with the responsibility of assisting in the promotion of foreign trade especially in capital goods, among member countries; providing technical assistance to member countries; and extending training facilities for personnel engaged in development activities in Muslim countries to conform to the Shari’ah.

Membership

The present membership of the Bank consists of 56 countries. The basic condition for membership is that the prospective member country should be a member of the Organisation of Islamic Cooperation (OIC), pay its contribution to the capital of the Bank and be willing to accept such terms and conditions as may be decided upon by the IDB Board of Governors.

Capital

Up to the end of 1412H (June 1992), the authorized capital of the Bank was two billion Islamic Dinars (ID) {A unit of account of IDB which is equivalent to one Special Drawing Right (SDR) of the International Monetary Fund (IMF)}. Since Muharram 1413H (July 1992), in accordance with a Resolution of the Board of Governors, it became six billion Islamic Dinars, divided into 600,000 shares having a par value of 10,000 Islamic Dinars (ID) each. Its subscribed capital also became four billion Islamic Dinars payable according to specific schedules and in freely convertible currency acceptable to the Bank. In 1422H, the board of governors at its annual meeting held in Algeria decided to increase the authorized capital of the Bank form ID 6 billion to ID 15 billion and the subscribed capital from ID 4.1 billion to ID 8.1 billion. According to the Directive of the Third Extra-Ordinary Session of the OIC Islamic Summit Conference held in Makkah Al-Mukarramah on 7- 8 December 2005, calling for a substantial increase in the capital stock of IDB in order to enable it to strengthen its role in providing financial support and technical assistance to its member countries, the Board of Governors of the IDB in its 31st Annual Meeting in Kuwait decided to increase the authorized capital stock of IDB by 15 billion Islamic Dinars to become 30 billion Islamic Dinars and the subscribed capital by 6.9 billion Islamic Dinars to become 15 billion Islamic Dinars.

Head Office and Regional Offices

The Bank’s principal office is in Jeddah in the Kingdom of Saudi Arabia. Four regional offices were opened in Rabat, Morocco (1994), Kuala Lumpur, Malaysia (1994). Almaty, Kazakhstan (1997), and Dakar, Senegal (2008). The Bank also has field representatives in twelve member countries. These are: Afghanistan, Azerbaijan, Bangladesh, Guinea Conakry, Indonesia, Iran, Nigeria, Pakistan, Sierra Leone, Sudan, Uzbekistan and Yemen.

Financial Year

The Bank’s financial year is the lunar Hijra Year.

Language

The official language of the Bank is Arabic, but English and French are additionally used as working languages.