Wednesday, 7 October 2015

The New Development Bank (NDB), formerly referred to as the BRICS Development Bank,[1] is a multilateral development bankoperated by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing American andEuropean-dominated World Bank and International Monetary Fund.[2] The goal of the bank is to "mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries".[3] The bank is headquartered in Shanghai, China.[4] Each participant country holds an equal number of shares[3] and equal voting rights, and none of the countries will have veto power.[5] There will be 1 million shares with a value of USD 100 000 (initially USD 500 000 shares), 20% of which will have to be directly paid in to the bank in the first 7 years after entry into force.[3]


The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi. The creation of a new development bank was the main theme on the agenda for the summit.[6] BRICS leaders agreed to set up a Development bank at the 5th BRICS summit held in Durban, South Africa on 27 March 2013.[2]
On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the Agreement on the New Development Bank, which is after its entry into force to form the legal basis for the bank.[3] The Agreement contains the Articles of Agreement of the Bank, and stipulates the total capital of $100 billion BRICS Development Bank, 12.5% of which is to be paid in by the members in the first 7 years. In a separate agreement, a reserve currency pool worth over another $100 billion was setup.[7] Both are partly motivated by the desire to counter the influence of Western-based lending institutions. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also signed.[8]
Shanghai was selected as the headquarters after competition from New Delhi and Johannesburg. An African regional center will be set up in Johannesburg.[9]
The first president will be from India,[10][11] the inaugural Chairman of the Board of directors will come from Brazil [4] and the inaugural chairman of the Board of Governors will be Russian.[4]
The 7th BRICS summit in July 2015 marked the entry into force of the Agreement. On 11 May 2015, K. V. Kamath was appointed as President of the Bank

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