A new USD 100 billion bank floated by the BRICS grouping opened in Shanghai today. It is projected to be an alternative to the World Bank and IMF to boost infrastructure funding in emerging economies and offer them tailor-made services. The New Development Bank (NDB) was inaugurated in China's financial capital. Chinese finance minister Lou Jiwei, Shanghai Mayor Yang Xiong and the bank's President K V Kamath attended the opening ceremony.
KV Kamath will be the bank's president for the first five years. The bank was conceived by the BRICS economies — Brazil, Russia, India, China and South Africa — at the BRICS summit in Fortalezza, Brazil last yeara amid efforts to finance infrastructure projects, mainly in member countries. It will supplement the existing international financial system in a healthy way and explore innovations in governance models. Its creation is to meet the urgent demand of such countries in infrastructure construction and beyond to complement the existing international banking system, instead of challenging it.
The bank will have an initial capital of USD 50 billion, to be expanded to USD 100 billion in the next couple of years. Each BRICS member will contribute an equal share to the startup capital. The BRICS nations, with 42.6 per cent of the global population and one thirds of the area, have a combined GDP accounting for one fifths of the world 's total. Each member country nation will have an equal say in the bank's management, regardless of its GDP siz.
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.