R1.2 trillion BRICS bank offically open for business

·21 Jul 2015

The New Development Bank (NDB) – formerly known as the BRICS Development Bank – has officially launched in Shanghai, China.

The bank is 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 bank was formed on agreement from all BRICS leaders at the 5th annual BRICS summit held in South Africa in 2013.

The BRICS economies comprise over 3 billion people – over 40% percent of the world’s population – and covers more than a quarter of the world’s land area and global GDP.

In July 2014, the emerging economies signed a document to officially create the $100 billion (R1.2 trillion) BRICS Development Bank and a reserve currency pool worth over another $100 billion.

The bank will begin operations with $50 billion, which will then expand to the full $100 billion in the next couple of years.

The Bank’s primary purpose is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.

This will complement the existing efforts of multilateral and regional financial institutions for global growth and development.

To do this, the bank will support public or private projects through loans, guarantees, equity participation and other financial instruments.

It will also cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank.

According to a report by the IBTimes, China will have the largest share of voting rights in the bank with its $41 billion pledged contribution.

Brazil, India and Russia will each contribute $18 billionn, while South Africa will put in $5 billion.