The New Development Bank (NDB) : The BRICS bank opens for business in China

Highlights:

  • The New Development Bank (NDB) floated by the BRICS nations to step up infrastructure funding in the emerging economies formally started its operations at its headquarters.
  • Chinese Finance Minister Lou Jiwei, Shanghai Mayor Yang Xiong and the bank's President K V Kamath attended the opening ceremony held in a hotel in Shanghai.
  • Mr.Kamath will be the bank's President for the first five years.
  • The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models.
  • 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 have initial capital of USD 50 billion, which will be expanded to USD 100 billion within the next couple of years.
  • Each BRICS member will contribute an equal share in establishing a startup capital.
  • The NDB was conceived as a counterbalance to Western-led financial institutions like 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 USD 50 billion Asia Infrastructure Investment Bank (AIIB) in which India and 56 other countries have joined.
  • The World Bank welcomed the opening of NDB.
  • Presently, Mr K V Kamath is the president of the New Development Bank and the founding members  are - Brazil, Russia, India, China, and South Africa.