A new $100 billion global bank dedicated to the emerging BRICS countries opened in China’s commercial hub Shanghai on Tuesday, officials said, as an alternative to other multilateral lenders.
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NBD expects to present the five-year development strategy of the bank not later than the end of this year.
The NDB will work with the AIIB, and a mutual hot-line will be set up, NDB president Kundapur Vaman Kamath 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 was conceived as a counterbalance to US-led financial institutions like the World Bank and International Monetary Fund by providing funding for infrastructure and development projects in BRICS countries. The main objective of the new finance infrastructure is to promote sustainable development in BRICS states.
The bank says on its website that it will have authorised capital of $100 billion, with $50 billion paid in initially. China will be responsible for the largest share of the CRA after contributing $41 billion to the bank. “We would like to congratulate K V Kamath, NDB president, and the founding members – Brazil, Russia, India, China, and South Africa – on this important occasion”, World Bank President Jim Yong Kim said in a statement.
BRICS represents 42 percent of the world’s population and roughly 20 percent of the world’s economy based on GDP, and 30 percent of the world’s GDP based on PPP, a more accurate reading of the real economy. Disagreements over the bank’s funding, management and headquarters had slowed its launch.
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NDB’s $100bn pool, called the Contingent Reserve Arrangement (CRA), is created to assist member countries at times of currency liquidity crises.
