special-board-of-governors-meeting-of-new-development-bank-summary

Context: Union Minister of Finance attended the Special Board of Governors meeting of the New Development Bank (NDB) through video-conference recently.

More on the news:

  • The agenda included the election of the next President of NDB, appointment of Vice-President and Chief Risk Officer and membership expansion.
    • Mr. K. V Kamath, the outgoing President of NDB is known for his stellar stewardship in very quickly giving shape to the vision stated by the BRICS Leaders in 2014. The swift response to COVID-19 through launch of the COVID-19 Emergency Programme Loan product will be remembered as one of his contributions.
    • New president: The Board of Governors have chosen newly-elected President Mr. Marcos Troyjo from Brazil and newly-appointed Vice President and CRO, Mr Anil Kishora from India. 
  • In her opening remarks, the Finance Minister commended the contribution of NDB in funding the infrastructure development, which has positively impacted the development agenda of the member countries, including India. 
  • Within a short span of time, NDB has approved 55 projects of member countries for an amount of $16.6 billion, which is quite a remarkable achievement. 

NDB

About:

  • Idea: At the fourth BRICS Summit in New Delhi (2012), the leaders of Brazil, Russia, India, China and South Africa considered the possibility of setting up a new Development Bank to  mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in developing countries. 
  • Agreement: Following the report from the Finance Ministers at the fifth BRICS summit in Durban (2013), the leaders agreed on the feasibility of establishing the New Development Bank and made the decision to do so.
  • Origin: During the sixth BRICS Summit in Fortaleza (2014), the leaders signed the Agreement establishing the New Development Bank (NDB).
  • The Bank formally came into existence as a legal entity at the inaugural meeting of the Board of Governors of the NDB chaired by Russia and held on the eve of the Ufa Summit in 2015. 
    • During the meeting, the appointment of the President, Mr. K.V. Kamath(Current President), as well as four Vice Presidents and the Board of Directors took place.
  • The NDB became fully operational at the signing of the Headquarters Agreement with the government of the People’s Republic of China in 2016. HQ - Shanghai

Objectives: 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, thus
  • contributing to collective commitments for achieving the goal of strong, sustainable and balanced growth.

Capital: The authorized capital for NDB is $100 Billion while initial subscribed capital is $50 billion. Initial subscribed capital was equally distributed among the founding members {$10 billion each}. 

Voting power of each member is equal to the number of its subscribed shares in capital stock.

The new leadership in continuing this momentum forward and taking NDB to the next level in terms of lending performance to members, transparency, international credibility and effectively achieving the NDB mandate. She suggested that the focus should also be given to achieve the twin objective of preserving BRICS values and growing NDB into a global development institution.

Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1627195