New Development Bank (NDB) by BRICS Nations
- The idea for setting up the bank was proposed byIndia at the 4th BRICS summit in 2012 held in Delhi.
- BRICS leaders agreed to set up a Development bank at the5th BRICS summit held in Durban, South Africa on 27 March 2013.
- On 15 July 2014, the first day of the6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the Agreement on the New Development Bank.
- At the7th BRICS summit in July 2015 The agreement entered into force with the ratification of all 5 states that had signed the Agreement on the New Development Bank.
Members & Capital Base of New Development Bank:
- Founding Members: BRICS Nations viz. – Brazil, Russia, India, China & South Africa.
- The bank will have starting capital of $50 billion, with capital increased to $100 billion over time.
- Brazil, Russia, India, China and South Africa will initially contribute $10 billion each to bring the total to $50 billion.
- Each participant country holds an equal number of sharesand equal voting rights, and none of the countries will have veto power.
- The bank will allow new members to join but the BRICS capital share cannot fall below 55%.
- The NDB is also backed by the China-floated USD 50 billion Asia Infrastructure Investment Bank (AIIB) in which India and 56 other countries have joined.
Headquarters of New Development Bank:
- The bank is headquartered in Shanghai, China.
- South Africa will be the African Headquarters of the Bank named the New Development Bank Africa Regional Centre.
- Main organs of New Development Bank:
(a) Board of Governors (b) Board of Directors (c) President & Vice President
- The inaugural chairman of the Board of Governors will be Russian
- The inaugural Chairman of the Board of directors will come from Brazil
- The first president will be from India – K V Kamath ex-ICICI Bank chairman has been appointed as first President of New Development Bank
- Primary goal of New Development Bank is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
- Will serve as an alternative to the existingAmerican and European-dominated World Bank and International Monetary Fund.
- Strengthen Economic cooperation among BRICS member nations
Quiz on New Development Bank
(Q.1) Where is the Headquarter of New Development Bank?
- Moscow, Russia
- New Delhi, India
- Shanghai, China
- Durban, South Africa
(Q.2) Who has been appointed as the first President of New Development Bank?
- K V Kamath
- Shikha Sharma
- Amartya Sen
- Deepak Parekh
(Q.3) The New Development Bank has starting capital of _______ and it will be increased to ______ over time
- $ 50 billion & $ 150 billion
- $25 billion & $ 100 billion
- $ 50 billion & $ 100 billion
- $ 25 billion & $ 150 billion
(Q.4) The agreement to establish New Development Bank was ratified at which BRICS Summit?
- 4th BRICS Summit, 2012
- 5th BRICS Summit 2013
- 6th BRICS Summit 2014
- 7th BRICS Summit 2015
(Q.5) Which among the following statement/s about New Development Bank is/are correct?
- The inaugural Chairman of Board of Directors of New Development Bank will come from Brazil
- The inaugural Chairman of Board of Governors will come from Russia
- Both (a) & (b)
- Neither (a) nor (b)
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