IMF’s board meet today, India likely to seek halting of financial assistance to Pak

Parameswaran Iyer, Executive Director at the World Bank, has been temporarily assigned as India’s nominee director on the IMF Board.

The crucial board meeting of the International Monetary Fund (IMF) is set to take place today, where India is likely to put forth a request to discontinue any financial assistance or loan package to Pakistan, in the wake of the April 22 terror attack in Pahalgam.

Foreign Secretary (FS) Vikram Misri on Thursday had said that IMF’s board should “look within” and look at the facts before bailing out Pakistan. During a press-briefing, Misri said: “Tomorrow there is a meeting of the board of the IMF, and I am sure that our Executive Director will put forward India’s position. But, I think the case with regard to Pakistan should be self-evident to those people who generously open their pockets to bail out this country.”

The FS stated that many financial assistance programmes have been sanctioned by the IMF in the last three decades, but only a few have reached successful conclusion. “So, I think this is a decision that (IMF) Board members have to take by looking deep within themselves and looking at the facts,” he said.

Earlier today, the Economic Affairs Division (EAD) of the Pakistan government appealed to the “international partner” for “more loans after heavy losses inflected by enemy”. “Amid escalating war and stocks crash, we urge international partners to help de-escalate,” the EAD wrote on X.

On May 6, Moneycontrol reported that India will ask the World Bank and the International Monetary Fund to curb funding to Pakistan at appropriate meetings in the coming weeks, quoting a senior official.

According to the Fund’s website, the cumulative outstanding purchase and loan agreements to Pakistan, since 1984 stood at $6.1 billion. The latest agreement to provide $7 billion to Pakistan was sanctioned by the Fund in September 2024. The ongoing 37-month extended fund facility programme includes six performance reviews throughout its duration, with the release of the next tranche—around $1 billion—dependent on the successful completion of the upcoming review.

Parameswaran Iyer, Executive Director at the World Bank, has been temporarily assigned as India’s nominee director on the IMF Board and will participate in the crucial Board meeting on May 9. His nomination at the IMF follows the early termination of KV Subramanian’s tenure, six months before the scheduled end of his three-year term.

Iyer will cast his vote at the IMF’s Excecutive Board meeting today. The Board, which consists of 25 members,  normally makes decisions based on consensus, but sometimes takes formal votes. The votes of each member equals the sum of its basic votes (equally distributed among all members), and quota-based votes, so that a member’s quota determines its voting power.

According to IMF's website, quotas determine the maximum amount of financial resources a member country is obliged to provide to IMF. For voting purposes, members get one vote per Special Drawing Rights (SDR) 100,000 of quota. Of the total quota of all members, India’s percentage is 2.75 percent, and the percentage of quota-based vote is 2.63 percent. For perspective, US’ quota weight is 17.42 percent, and quota-based vote is 16.49 percent.