Proposed Amendment of the Articles of Agreement of the International Monetary Fund on Reform of the Executive Board approved.

Press Information Bureau

Government of India

Ministry of Finance

30-September-2011 14:24 IST

Proposed Amendment of the Articles of Agreement of the International Monetary Fund on Reform of the Executive Board approved

The Union Cabinet today gave its approval to certain amendments to the IMF's Articles of Agreement on Reform of the Executive Board of the IMF.

The amendments are part of a package of reforms on quotas and governance in the IMF. Along with the recent quota reforms in IMF (i.e., Fourteenth General Review of Quotas), these amendments represent a major overhaul of the Fund's quotas and governance, and help in strengthening the Fund's legitimacy and effectiveness .

At the 24-member Executive Board of the IMF, currently the members with the five largest quotas appoint an Executive Director each, while the rest of the Executive Directors are elected. However, the proposed amendments would facilitate a move towards a more representative, all-elected Executive Board, ending the category of appointed Executive Directors.

The proposed amendments are also a part of the efforts at the IMF to reform its governance structure to give greater representation to the Emerging Market and Developing countries (EMDCs) to reflect the new global realities. To this end, there has been a consensus to reduce the number of Executive Directors representing advanced European countries by 2 in favour of EMDCs.

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RCJ/SK/SM