BRICS Bank approves $400 million loans for India, Russia

• The Shanghai-based Brics New Development Bank (NDB) has approved two infrastructure and sustainable development projects in India and Russia with loans of $400 million.
• The loans will be used to rehabilitate the Indira Gandhi canal system in India and to build a toll transport corridor connecting Ufa city centre to the M-5 federal highway in Russia.

About NDB:

• The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states (Brazil, Russia, India, China and South Africa) The decision to establish the bank was made in fourth BRICS Summit in New Delhi in 2012 and subsequently announced in the fifth BRICS Summit in Durban in 2013 to establish a development bank. On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed have agreed on the establishment of the New Development Bank (NDB)

Purpose and Functions

• The New Development Bank starts with an objective of funding infrastructure projects in the developing countries and meets the aspirations of millions through sustainable development.
• The purpose of the Bank shall be to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries to complement the existing efforts of multilateral and regional financial institutions for global growth and development.
• The Bank mobilizes resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.
• To fulfill its purpose, the Bank supports public or private projects through loans, guarantees, equity participation and other financial instruments. It also cooperates with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank.

Capital and Shares

• The New Development Bank have an initial subscribed capital of US$ 50 billion and an initial authorized capital of US$ 100 billion. The initial subscribed capital is equally distributed amongst the founding members. The voting power of each member shall equal its subscribed shares in the capital stock of the Bank

Organization and Management

• The Bank headquarters is in Shanghai.The Bank have a Board of Governors, a Board of Directors, a President and Vice-Presidents. The President of the Bank is elected from one of the founding members on a rotational basis, and there are at least one Vice President from each of the other founding members. The President is the chief of the operating staff of the Bank and conducts under the direction of the Directors.

Membership

• The founding members of the Bank are the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China and the Republic of South Africa. The membership shall be open to members of the United Nations, in accordance with the provisions of the Articles of Agreement of the New Development Bank. It shall be open to borrowing and non-borrowing members.

By: Vishal