BRICS: India gets Presidency, Shanghai the Bank

A senior govt official involved in talks said China may walk away with bank’s headquarters in Shanghai.

Written by Vaidyanathan Iyer | Fortaleza | Updated: July 16, 2014 8:54 am
modi Prime Minister Narendra Modi with President of China Xi Jinping during the bilateral meeting in Fortaleza in Brazil on Monday. (Source: PTI)

After two days of hectic negotiations at the  BRICS Summit  India on Tuesday got the presidency of the BRICS New Development Bank. A senior government official involved in the talks said the bank will be headquartered in Shanghai.

China and Russia were in close coordination during the negotiations, after their recent multi-billion dollar gas deal.

“The BRICS Bank is an idea originally conceived by India. Every BRICS member is certain that such a bank is the need of the hour, particularly with the Bretton Woods institutions such as the World Bank and the IMF failing to give adequate representation to developing nations over the last many decades,” said the official.

modibrics_475

The four issues that were open for discussion on the BRICS Bank were its name, location, presidency and shareholding. The bank has been formally named BRICS New Development Bank.

South Africa, which was originally pitching for the presidency, withdrew its bid and backed India instead. South Africa sees in India an ally at the World Trade Organisation talks, particularly in areas of agriculture, concessions to LDCs and non-binding issues.

bricsmodi2_475

India has ensured that all countries have equal shareholding in the bank, with equal contribution to the capital.

“Equal shareholding is a fait accompli now. Nobody wants BRICS Bank to end up like the Bretton Woods institutions,” said the official.

The project costs would be based on a formula depending on the economic weight of the member countries. “We have a large number of new big projects. We will gain,” said an official.

The bank will be capitalised at $ 50 billion, with each country chipping in $ 10 billion over the next seven to eight years.
Under the earlier UPA government, India had agreed to China’s demand for locating the bank’s headquarters in Shanghai. “We fought hard for the presidency, and we got it,” said the official.

 

For all the latest Business News, download Indian Express App

  1. A
    arvind
    Jul 15, 2014 at 2:37 pm
    It is a fruitful visit. Our Maharashtra CM Antule had visited London to bring back Bhavani Talwar from London Museum. He could not able see that Sword forget about bringing back to India. After one visit Modi has got Presidency of new Bank, it is a good and commendable thing. Our Pratibhatai Patil had visited atleast 100 times to various foreign Cities, what she had done? Can she tell at least one things out of 100 visits which had any fruits that she had brought.
    Reply
    1. S
      Sbatra
      Jul 15, 2014 at 1:44 pm
      One year presidency for loss of permanent headquarters in China.
      Reply
      1. C
        C B
        Jul 15, 2014 at 4:48 pm
        f the BRICS are to be insutionaly balanced, its bank's headquarters should be located in South Africa. Such a bad move to choose a Chinese city instead.
        Reply
        1. G
          Girish
          Jul 15, 2014 at 1:27 pm
          china is the cat among pigeons.basing the bank there doesn't strike as a particularly bright idea when china is already aggressively getting into everybody's territory. president of the bank is just a post, and it will change.is this how modi sarkar firmly negotiate?resign yourself to china taking over more Indian territory then because our PM would much rather do business. profit at any cost, profit at all costs.
          Reply
          1. O
            OpinionatedOrator
            Jul 16, 2014 at 8:58 am
            There is no end to your baseless imagination, appreciation, and clueless criticism
            Reply
            1. O
              OpinionatedOrator
              Jul 16, 2014 at 8:56 am
              You don't have any clue what are you talking about? Read the timeline of the events and you will realize setting up BRICS Bank was India's original idea during UPA's tenure
              Reply
              1. J
                jayplanes
                Jul 15, 2014 at 1:29 pm
                $ 50 Billion is a good start, but to be a heavy weights in this field -IMF and World Bank, the capitalization should rapidly aim to $ 100 Billion mark. Low capitalization will ensure playing second fiddle to the Brentwoodies.
                Reply
                1. J
                  jayplanes
                  Jul 15, 2014 at 4:41 pm
                  India can have the headquarters when 5 essentials for a headquarters are met- 24-7 water, 24-7 electricity, no hartals, no communal violence, no temperamental politicians in the opposition. China can ure 24-7 water, 24-7 electricity, zero hartals, zero communal violence in its capital, and absolutely zero opposition- temperamental or otherwise. Mr. Modi - the genius in diplomacy understands that and opted for two things that could be achieved - a) the first Presidency, b) equal partner status in shares and voting rights for all the member countries forming the bank.
                  Reply
                  1. Load More Comments