Global Indian News
NEW YORK: In the backdrop of the United Nations General Assembly (UNGA) approving text-based negotiations in reforming the UN Security Council (UNSC), the BRICS countries have stressed on the need …
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In what could be a big boost to the use of Renminbi (RMB) internationally, China’s currency is all set to become the first currency that the New Development Bank (NDB) …
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The New Development Bank (NDB) that was launched by the BRICS countries at the 7th summit in Ufa to provide the much-needed infrastructure funding to the emerging economies formally …
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The theme of the recently concluded BRICS summit at Ufa, Russia, was titled “BRICS Partnership- a Powerful Factor of Global Development”. The focus thus was on strengthening cooperation in areas …
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Reinforcing their commitment to remapping the global financial landscape, the leaders of the BRICS group of emerging powers declared operationalized their two signature initiatives the New Development Bank (NDB) and Contingent Reserve Agreement(CRA), saying these institutions will act as a global safety net amid fragile economic recovery. “We welcome the substantive progress that was made since the Fortaleza Summit on 15 July 2014 during the Brazilian BRICS Chairmanship, especially the establishment of BRICS financial institutions: the New Development Bank (NDB) and the Contingent Reserves Arrangement (CRA). The Ufa Summit marks their entry into force,” said the Ufa Declaration. Amid fragile global recovery, the BRICS also formally adopted strategic economic partnership which will upscale trade and investment among emerging economies and positioned them as the future hub of economic growth.
The 7th BRICS summit has imparted a big push to the ongoing project of recasting the global financial system and underscored the centrality of emerging powers in this process.
UFA (Russia): In a veiled critique of the Western powers which would have been cheered by Moscow facing pressure over the Ukraine crisis, India’s Prime Minister Narendra Modi took a …
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India’s Prime Minister Narendra Modi unveiled a 10-step formula for buttressing the BRICS grouping of emerging powers. The Indian leader’s proposals encompassed a wide spectrum of areas, ranging from business, …
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It seems to be a golden period for China with yet another non-Bretton Woods institution challenging the West-dominated international financial institutions which have controlled the global financial system post 1945. Two days after 50 countries signed on to become members of the China-led Asian Infrastructure Investment Bank, the Chinese Parliament has ratified the creation of the New Development Bank of BRICS countries. The parliaments of India and Russia have already ratified the NDB, which will be headquartered in Shanghai, and will have an Indian as the CEO of the newly created institution.
With the setting up of these two banks, China has scored a point against the US and the West which have been ignoring the BRICS’ appeal for greater voting rights in the IMF and reform of global financial governance system. The NDB’s shareholding is on an equitable basis, with China, India, Brazil and South Africa contributing 20 per cent of the start-up capital of $50 billion, with a goal to reach a capitalization of US$100 billion.
The formal launch of NDB and AIIB is set to recast global financial landscape. Some will contend that 2015 seems to be the year of China when it became a game changer by hosting two new multilateral banks of the global South.
Moving beyond the construction of rivalry between the two Asian giants, India has emerged as the second largest shareholder in the China-led Asian Infrastructure Investment Bank (AIIB), which is expected to provide development finance to Asia’s third largest economy which needs at least $1 trillion to bolster its infrastructure.
The 60-article agreement specifies structure and policy-making mechanism, as well as its member’s shares in the bank. The AIIB will have authorized capital of $100 billion, with Asian countries contributing up to 75 per cent of the total capital.
The delegates from 50 member countries gathered at the majestic Great Hall of the People in Beijing on June 29 to sign an agreement, providing the legal framework for the China-led Asian Infrastructure Investment Bank (AIIB), which is seen as a rival to the world’s major financial institutions, including the World Bank and Asian Development Bank.
Seven more countries are due to sign by the end of the year. For India, its ambassador to China Ashok Kantha signed the document.
Read MoreThe BRICS’ signature initiative, the New Development Bank (NDB), a symbol of the grouping’s drive to recast global financial governance architecture, is expected to begin its operations and take up projects by April 2016.
NDB bank will function on the lines of world’s major financial institutions including World Bank, Asian Development Bank, and private money lenders. It will be given the same privileges as those institutions. The bank will have vice presidents from three other nations.
Speaking at the CII National Council Meeting in Mumbai on June 25, the newly appointed chief of the New Development Bank of BRICS countries K V Kamath said, “NDB has opted for a larger canvas by expanding its scope of operations to other member nations. The name of the bank was changed as new partner countries are likely to join the BRICS group of emerging economies.”
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