BRICS Launches New Development Bank
21 July 2015
Officials from the world’s largest emerging nations – Brazil, Russia, India, China, and South Africa (BRICS) – launched the New Development Bank (NDB) on 21 July 2015 in Shanghai, China. The NDB will lend money to developing countries and help finance infrastructure projects in BRICS countries.
Pitched as an alternative to institutions such as the World Bank and International Monetary Fund, NDB President Kundapur Vaman Kamath said the bank’s objective is not to challenge the existing system but to improve and complement the system. Asian Development Bank (ADB) President Takehiko Nakao welcomed the new member to the global family of multilateral development banks. ADB looks forward to exploring possible co-financing opportunities in infrastructure and projects promoting sustainable development. World Bank President Jim Yong Kim also congratulated Mr. K.V. Kamath and the founding BRICS members as NDB joins the growing list of multilateral institutions.
NDB will have an initial capital of US$50 billion to be equally funded by the five members with equal voting rights. The capital will expand to US$100 billion in the next couple of years. BRICS countries have also established a Contingent Reserve Arrangement (CRA) worth another US$100 billion designed to assist member countries in times of currency liquidity crises. China has the largest share of CRA at US$41 billion; Brazil, India, and Russia will each contribute US$18 billion; and South Africa is set to contribute US$5 billion.
NDB is expected to be fully operational by end 2015 or early 2016.
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