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The Finance and Corporate Affairs Minister urged the New Development Bank (NDB) to consider working closely with India’s new development financing institution for funding infrastructure.
About
- The NDB has so far approved 18 projects in India, including emergency loans of $2 billion to support health spending and economic recovery in the aftermath of the COVID-19 pandemic.
- India’s quick response to limit the impact of the pandemic and to undertake massive vaccination drives result in a V-shaped recovery and hence NDB’s role is much needed.
- Further investments effectively meet the evolving development needs of member countries and encouraged it to develop a synergistic relationship with various other multilateral development banks and DFIs, including the new DFI being set up by India.
New Development Bank (NDB)
- It is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa).
- Establishment: Agreed by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013. Later was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.
- It was established with an initial authorized capital of USD 100 billion.
- HQ: Shanghai, China.
- Aim & Objectives: To foster greater financial and development cooperation among the five emerging markets.
- To mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
- Voting method: Unlike Asian Infrastructure Investment Bank (AIIB), voting power is based on the number of one’s subscribed share in the capital stock of the Bank, and the share of the BRICS countries can never be below 55% of the total votes.
- Currently, each of the five NDB members has equal voting rights of 20%.
- None of the countries has the veto power.
- In 2018, the NDB received observer status in the United Nations General Assembly, establishing a firm basis for active and fruitful cooperation with the UN.
How is NDB different from AIIB?
- AIIB has 57 countries predominantly of Asia and Pacific region whereas NDB has five BRICS countries.
- Decision making in the NDB is more democratic, each member has one vote and decisions are taken by a simple voting method.
- Whereas voting shares in AIIB are based on the size of each member country’s economy (GDP in PPP terms) and not on the basis of contribution to the bank’s authorized capital. China, India and Russia are the three largest shareholders.
Source: TH
