• New Development Bank or the BRICS Development
Bank is a multilateral development bank operated by the BRICS states.
• Aims to mobilize resources for infrastructure
and sustainable development projects in BRICS and other emerging economies and
developing countries.
• Headquartered at Shanghai with African Regional
Centre at Johannesburg.
An alternative to the existing :
• World Bank & International Monetary Fund.
Origin:
• Idea for setting up NDB – 4th BRICS summit 2012,
Delhi.
• Leaders agreed to set up NDB – 5th BRICS summit
2013, Durban, South Africa.
• 6th BRICS summit held in Fortaleza, Brazil,
2014, signed the document for $100 billion BRICS Development Bank and a reserve
currency pool worth over another $100 billion.
Terms & Objectives:
• Primary focus of lending will be infrastructure
projects with authorized lending of up to $34 billion annually.
• Will have starting capital of $50 billion, with
capital increased to $100 billion over time.
• Brazil, Russia, India, China & South Africa
will initially contribute $10 billion each to bring the total to $50 billion.
• No member can increase its share of capital
without other 4 members agreeing – a primary requirement of India.
• The bank will allow new members to join but the
BRICS capital share cannot fall below 55%.
• Initial authorized capital : 100 billion.
• Initial subscribed capital : 50 billion (each
member gave 10 billion) .
For all the BRICS states :
• total shares 100,000.
• Shareholding capacity – 20%.
• Voting right
– 20%.
• Authorized capital – 10 billion USD.
Official language :
• Chinese,
• English,
• Portuguese,
• Russian and
• 22 Official Languages of India.
Contingent Reserve Arrangement (CRA) :
• Provision of support through liquidity &
precautionary instruments in response to potential short-term balance of
payments pressures
• To provide protection against global liquidity
pressures including currency issues where members’ national currencies are
being adversely affected by global financial pressures.
• China → 41 Billion.
• Brazil, India, Russia → 18 Billion Each.
• South Africa → 5 billion.
Participant countries:
• Brazil,
• Russia,
• India,
• China,
• South Africa.
• None of the above country has veto power.
• Each country holds equal number of shares and
equal voting rights.
• Initial capital for NDB – 100 billion, of which
12.5% to be paid by each member in 1st 7 years.
• 1st President of NDB from India – K. V. Kamath – former non-executive
chairman of ICICI bank.
• NDB will allow new member to join but the BRICS
capital share cannot fall below 55%.
Main organs of Articles of Agreement:
• Board of ministers or governors.
• Board of Directors.
• President : K. V. Kamath , Vice President : Mr. Vladimir Kazbekov.
• 1st President – India, Chairman of the Board of directors – Brazil, Chairman of Board of governors – Russians.
• 1st President – India, Chairman of the Board of directors – Brazil, Chairman of Board of governors – Russians.
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