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 started its operations on July 21 at its headquarters in Shanghai. China’s Finance Minister Lou Jiwei and NDB President K.V Kamath, veteran Indian banker, attended the opening ceremony.
As per the agreement between the BRICS member countries, Mr Kamath would be the president of the bank for the first five years. “The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models,” said China’s Finance Minister at a seminar following the ceremony.
The NDB will initially have a start-up capital of USD 50 billion with an equal share of contribution by each member country. It is expected to expand to USD 100 billion in the next couple of years. Each country will have an equal say in the bank’s management irrespective of its economic size.
While congratulating Mr Kamath on the opening of the NDB Bank, the World Bank President Jim Yong Kim said, “We are committed to working closely with the New Development Bank and other multilateral institutions, offering to share our knowledge and to co-finance infrastructure projects. These types of partnerships will be essential to reach our common goals to end extreme poverty by 2030, boost shared prosperity, and to reduce inequalities”.
The NDB was seen by many as a counter to the Bretton Woods institutions like the World Bank. But the Ufa Declaration has empahsised that the NDB will complement existing multilateral financing institutions.
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