Development Bank History

History
Development banks started during the time of industrial revolution in the countries which are said to be now developed. More than a century ago United States of America got Industrialised and United Kingdom and other European countries also followed soon and developed their own Industrial base. These countries reached their level of Industrialisation through long term investment financing of banks which at that time took the risk of entering a new field of production. One example of this type of Financing is construction of railroads in America which goes way back in 1700s.
Since the end of World War II the institution of development bank has received world-wide acceptance and popularity and has come to be regarded as instrument for

The International Bank for Reconstruction and Development (Usually called as World Bank) encouraged formation of development banks. The World bank has functioned as bridges of transfer of enormous financial and technical resources from developed to developing nation. Many National Development Finance institutions which is also called as World Bank were established in many countries around the world. Some of the large
Regional development banks include the Inter-American Development Bank, established in 1959, the African Development Bank, established in 1964 and the Asian Development Bank, which began operations in 1966.

The International Bank for Economic Cooperation was established in 1963 with the Soviet Union, Hungary, Bulgaria, Poland, Czechoslovakia, East Germany, Mongolia, and Romania as members. Vietnam and Cuba joined later. Its purpose was to finance trade among its members. These nations were also a part of International Investment Bank with a purpose to make loans for economic development.

Evolution of development banks in

Private sector was the engine of growth.
• Existing financial sectors in these countries were dominated by commercial banks which were contented with short term banking activities and were not looking forward to the long term investment in national priorities
• Long-term resource allocation should be done by business-oriented financial institutions vis-à-vis direct allocation by the government.

Development Bank Owners
Development banks may be privately or publicly owned and operated, although government makes substantial initial contribution to the capital during the setup. The cost and form of financing offered by development banks depend upon their cost of obtaining capital and need to show profit and pay dividends. In Asia and pacific about nine out of development banks are owned by governments.
Types of development banks
There are four general types of development banks:-
1. Commercially-oriented development banks: They support development through commercial banking services as in Singapore.
2. Policy banks: They directly support the economic plans and directives of national governments. As can be found in Malaysia, Japan, Korea and