Govt. appoints Urjit Patel as IMF Executive Director

• The Government of India has approved the appointment of Urjit Patel (former RBI Governor) as Executive Director (ED) at the International Monetary Fund (IMF) for a three-year term.

• He will replace K.V. Subramanian, whose services were terminated six months before completion of his tenure (termination effective from April 30, 2025).

• India belongs to a four-country constituency at the IMF, along with Bangladesh, Sri Lanka, and Bhutan.

IMF Executive Directors (EDs): Election and Functions

Composition and Election

• The IMF Executive Board has 25 Executive Directors (EDs).

• They are elected every two years by member countries or groups of countries (constituencies).

• The voting power of each ED reflects the quota and shareholding of the countries in their constituency.

• Representation:

  • All 190+ member countries are represented on the Board, either directly (for major economies) or through a constituency system (small/medium countries grouped together).

  • India belongs to a joint constituency (India, Bangladesh, Sri Lanka, Bhutan).

• Selection Process:

  • Each constituency elects or appoints one ED.

  • Large shareholders like the US, Japan, China, Germany, France, UK appoint their EDs directly.

  • In multi-country constituencies, member countries agree on rotation or consensus to nominate their ED.

Functions

• Policy-making and oversight:
  EDs are responsible for conducting the day-to-day business of the IMF, unlike the Board of Governors, which meets only annually.

• Lending and surveillance:
  Approve IMF loans, monitor macroeconomic policies of member countries, and conduct surveillance of global economic trends.

• Representation:
  Each ED represents the interests of their constituency at the IMF.

• Decision-making:
  EDs vote on IMF decisions, with the weight of their vote linked to the financial quota of their constituency.

• Advisory role:
  Provide policy inputs to manage crises, design structural adjustment programs, and shape reforms in the international monetary system.