The BRICS Development Bank

The BRICS Development Bank, now called the New Development Bank (NDB) is a multilateral development ban k set up by the BR ICS association. The bank aims to allocate resources among the five member countries and more importantly attempts to break the monopoly of the US dominated financial institutions like the World Ban k and the International Monetary Fund.

The decision to establish such an institution was taken during the 5th BRIC S Summit in South Africa. It was the 6th B RICS summit that ratified the establishment of the ba nk. The member countries signed the document that paved way to a $200 billion development b ank -$100 billion New Development Ba nk and $100 million reserves. The NDB’s headquarters will be located in Shanghai with an African regional office in Johannesburg. The first president will be from India, chairman of the Board of Directors from Brazil and chairman of the Board of Governors will be from Russia.

Unlike the World Ban k and IMF, the New Development Bank will not have veto voting power. Each member country will be assigned only one vote and each vote will be of equal significance (not subject to president-ship). The main focus of lending will be infrastructure and developmental projects. A cap of $34 billion has been placed as the maximum annual lending amount. The African centre is called the New Development B ank African Regional Centre which will have $50 billion as the starting capital. This will be raised to $100 billion with time. All the member countries are to contribute $10 billion each to reach the initial capital amount of $50 billion. New members will be allowed however, the BRI CS capital share will not be permitted to fall below 55%. Moreover, no member country will be allowed to increase their share without consent from the rest of the members.

The Contingent Reserve Arrangement (CRA) is a framework established to provide liquidity and preventative instruments in case of short term/actual pressures on the balance of payments. This framework has essentially been set up to deal with financial troubles. The B R I C S nations aim to propel the NDB as one of the premier international financial institutions.

Know more here http://www.b20coalition.org/business-federations-news/people-watch/anton-siluanov-to-become-first-board-chairman-of-brics-development-bank

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