India has named private banker K.V. Kamath as the first head of the new development bank the BRICS group of emerging market economies is setting up.
The New Development Bank:
It is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing US-dominated World Bank and International Monetary Fund.
- The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013.
- The bank is set up to foster greater financial and development cooperation among the five emerging markets.
- The bank will be headquartered in Shanghai, China.
- Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and none of the countries will have veto power.
What it does?
The New Development Bank will mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement existing efforts of multilateral and regional financial institutions for global growth and development.
- The establishment of the Bank will help India and other signatory countries to raise and avail resources for their infrastructure and sustainable development projects.
- It would also reflect the close relations among BRICS countries, while providing a powerful instrument for increasing their economic cooperation.
- It is expected to allow India to raise and obtain more resources for the much needed infrastructure development, the lack of which is coming in the way of inclusiveness and growth as of now.
- It will make available additional resources thereby recycling the savings accumulated in emerging countries which are presently being locked up in Treasury bonds having much lower returns.
Sources: The Hindu, Wiki, NDB, BRICS.