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New Development Bank

Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

New Development Bank

What to study?

For Prelims and Mains: NDB- roles, composition, objectives and functions.

Context: Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman attended the Special Board of Governors meeting of the New Development Bank (NDB) through video-conference.

The agenda included the election of next President of NDB, appointment of Vice-President and Chief Risk Officer and membership expansion.

About the New Development Bank:

It is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa).

  • The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013.
  • It was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.
  • The bank is set up to foster greater financial and development cooperation among the five emerging markets.
  • In the Fortaleza Declaration, the leaders stressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development.

The bank will be headquartered in Shanghai, China.

Voting:

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.

Roles and functions:

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.

InstaThink:

Prelims Link:

  1. NDB- members and voting powers.
  2. Where it can invest?
  3. Which are the NDB funded projects in India?
  4. Fortaleza declaration is related to?
  5. When was NDB established?

Mains Link:

Discuss the objectives and significance of NDB.

Sources: pib