The IMF has announced implementation of its long due quota reforms which was approved by the US Congress last year that will give more voting rights to emerging economies like India and China in the functioning of the organisation.
The reforms by International Monetary Fund (IMF) represent a major step towards better reflecting in the institution's governance structure, the increasing role of dynamic emerging market and developing countries, IMF said in a statement, adding that this will reinforce its the credibility, effectiveness and legitimacy.
For the first time four emerging market countries (Brazil, China, India, and Russia) will be among the 10 largest members of the IMF.
The reforms also increase the financial strength of the IMF, by doubling its permanent capital resources to SDR 477 billion (about USD 659 billion).
"These reforms will ensure that the fund is able to better meet and represent the needs of its members in a rapidly changing global environment.
"Today marks a crucial step forward and it is not the end of change as our efforts to strengthen the IMF's governance will continue," IMF Managing Director Christine Lagarde said.
The IMF reforms that came into effect yesterday was approved by it in 2010, but was unable to implement it in the absence of its approval by the US Congress, which it did last year.
As a result of the quota reforms, four emerging market countries (Brazil, China, India, and Russia) will be among the 10 largest members of the IMF.
Other top 10 members include the US, Japan, and the four largest European countries (France, Germany, Italy, and the UK).
Also for the first time, the IMF's Board will consist entirely of elected Executive Directors, ending the category of appointed Executive Directors.
Currently the members with the five largest quotas appoint an Executive Director. The scope for appointing a second Alternate Executive Director in multi-country constituencies with seven or more members has been increased to enhance these constituencies' representation in the Executive Board.
As a result, 13 constituencies including both African constituencies are currently eligible to appoint an additional Alternate Executive Director, it said.
IMF said following the effectiveness of the 14th General Review of Quotas, the focus will now turn to work on the 15th General Review of Quotas and securing the necessary broad consensus, including on a new quota formula.
With the entry into force of the Board Reform Amendment and all other general effectiveness conditions met, members can now pay for their quota increases to make them effective.
This process is expected to be substantially completed within one month, the IMF said.