A new $100 billion bank floated by BRICS nations, including India, as an alternative to the World Bank and IMF to boost infrastructure funding in emerging economies and offer them tailor-made services was launched here on Tuesday.
The opening ceremony of the New Development Bank (NDB) was held here in China’s financial capital Shanghai. China’s Finance Minister Lou Jiwei, Shanghai Mayor Yang Xiong and the bank’s President KV Kamath attended the opening ceremony.
Kamath, 67, who will be the bank’s President for the first five years, said he was confident of delivering on people’s expectations of the new bank.
“Countries should closely cooperate,” Kamath, a former executive with India’s largest private lender ICICI Bank, said.
“We will listen carefully to our members and try to offer tailor-made services for them,” he said.
BRICS economies — Brazil, Russia, India, China and South Africa — launched the multi-billion dollar development bank at the 7th BRICS summit held in the Russian city of Ufa on July 8 amid efforts to finance infrastructure projects, mainly in member-countries. “The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models,” Lou said at a seminar following the launch of the bank. “Its creation is to meet the urgent demand of such countries in infrastructure construction and beyond,” he added.
The NDB will have an initial capital of $50 billion, which will be expanded to $100 billion within the next couple of years. Each BRICS member will contribute an equal share in establishing the start-up capital.
BRICS nations, with 42.6 per cent of the world’s total population and roughly a third of the world’s land area, have a combined GDP totalling about one-fifth of the global total.
The NDB was conceived as a counterbalance to US-led financial institutions, such as the World Bank and the IMF by providing funding for infrastructure and development projects in BRICS countries. Each nation will have an equal say in the bank’s management, regardless of GDP size, according its officials.
The NDB is also backed by the China-floated $50 billion Asia Infrastructure Investment Bank (AIIB) in which India and 56 other countries have joined.
The World Bank welcomed the opening of NDB