On Tuesday, a day ahead of the July 8-9 Seventh BRICS summit, the board of governors of the BRICS New Development Bank (NDB) held its first meeting in Moscow and wrapped up a legal framework for the bank, setting the stage for the formal launch of the $100 billion bank at the Ufa summit. Another proposal for a currency reserve pool worth $100 billion is also likely to be formally launched at Ufa on Wednesday.
The New Development Bank is being touted as a financing alternative to the World Bank, where the five BRICS nations have sought more clout in decision making. The Contingent Reserve Arrangement will let the BRICS members to draw funds when going through a crisis.
The bank, headquartered in Shanghai, is to finance infrastructure and sustainability projects in BRICS and other emerging and developing countries. K V Kamath, whom India had nominated to be the first president of the NDB, has taken up his new assignment and attended the Moscow meeting and is slated to attend the deliberations starting Wednesday in Ufa.
Vladimir Dmitriev, chairman of the Bank for Development and Foreign Economic Affairs (Vnesheconombank), has indicated that at the Ufa summit, the members will sign special memorandum for the New Development Bank announcing several priorities for the NDB, with removing infrastructural constraints for growth being one of them.
Kamath, former head of ICICI Bank, India’s second largest bank and a former chairman of IT major Infosys Ltd, had stated in a media interaction in June that the BRICS countries needed new developing partners and the NDB bank was one such partner.
“We need to understand what all multilateral banks have been doing, try to see what we can do now, given the challenges, and then put forth our own agenda. We need not repeat the mistakes done in the past,” he said, adding that the Bank will look for financing not just important but also bankable projects. “Unless you are able to recover money in time you cannot go one for a long time.”
According to the bank’s governing structure, the position at the helm will next be transferred to Brazil and then to Russia. It will be headquartered at Shanghai, China.