BRICS Bank now operational

The New Development Bank BRICS (NDB BRICS), formerly referred to as the BRICS Development Bank is now operational. The Bank is a multilateral development bank founded 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 is set up to foster greater financial and development cooperation among the five emerging markets. 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.

The five big emerging market economies (BRICS) have strengthened co-operation with a constant goal in mind: to challenge the West’s grip on the Bretton Woods institutions by creating their own monetary fund and development bank.

They chafe at their under-representation at the IMF; the voting rights of China, the world’s second-largest economy, are not even a quarter of those of the US. An IMF reform that would slightly correct the imbalance has been languishing for three years. A battle seems to have a foregone conclusion because of the composition of the IMF executive board, which names the managing director. It is dominated by Europeans and Americans.

The BRICS Bank shall in its role mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

To fulfill its purpose, the Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments. It shall also cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank.

Even though the bank has 5 founding members, the Bank shall be open to members of the United Nations, in accordance with the provisions of the Articles of Agreement of the New Development Bank and shall be open to borrowing and non-borrowing members.

To fulfill its purpose, the Bank is authorized to exercise the following functions:

(i) to utilize resources at its disposal to support infrastructure and sustainable development projects, public or private, in the BRICS and other emerging market economies and developing countries, through the provision of loans, guarantees, equity participation and other financial instruments;

(ii) to cooperate as the Bank may deem appropriate, within its mandate, with international organizations, as well as national entities whether public or private, in particular with international financial institutions and national development banks; 

(iii) to provide technical assistance for the preparation and implementation of infrastructure and sustainable development projects to be supported by the Bank; 

(iv) to support infrastructure and sustainable development projects involving more than one country; 

(v) to establish, or be entrusted with the administration, of Special Funds which are designed to serve its purpose. 

The Bank has its headquarters in Shanghai.China and the Bank may establish offices necessary for the performance of its functions and as such the first regional office is in Johannesburg, SA.

The Bank shall have a Board of Governors, a Board of Directors, a President, Vice-Presidents as decided by the Board of Governors, and such other officers and staff as may be considered necessary. With India providing the bank’s president, the bank’s four vice-president’s come from each of the other Brics member countries (Brazil, Russia China and SA). SA’s vice-president is Leslie Maasdorp, who, as chief financial officer, will be responsible for treasury and portfolio management as well as the finance, budgeting and accounting functions.

The Bank in its operations may provide financing in the local currency of the country in which the operation takes place. 

The Bank shall possess full international personality and enjoy wide immunities.