Finance Minister Nirmala Sitharaman asked the New Development Bank (NDB) to enhance emergency facility to $10 billion to deal with the challenges posed by the outbreak of COVID-19 pandemic.

During discussion on COVID-19 at the fifth annual meeting of the Board of Governors of the NDB through video conferencing, Sitharaman appreciated the efforts of the multilateral lending agency on fast tracking of financial assistance of about $5 billion to BRICS countries, including an emergency assistance of $1 billion to India to combat pandemic.

Lauding efforts of the NDB in establishing itself as a credible Global Financial Institution and delivering its mandate successfully by taking more sustainable and inclusive approach, Sitharaman said it should take appropriate actions to join G-20 forum along with other Multilateral Development Banks (MDBs)/International Financial Institutions (IFIs).

She urged NDB to follow innovative practices in supporting the BRICS nations for achieving their Sustainable Development Goals.

New Development Bank

New Development Bank (NDB) is a multilateral bank established by BRICS — Brazil, Russia, India, China and South Africa. 

The purpose of the bank is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries to complement the existing efforts of multilateral and regional financial institutions for global growth and development.

The NDB members represent 42 percent of the world population, 27 percent of the global surface area and account for over 20 per cent of the global GDP.

The NDB has an initial authorised capital of $100 billion and initial subscribed capital of $50 billion of which $10 billion is paid-in capital. The initial subscribed capital is equally distributed amongst the founding members.

NDB has so far approved 14 projects in India for an amount of $4,183 million.

History of NDB

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 bank to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in developing countries. They directed finance ministers to examine the feasibility and viability of this initiative, to set up a joint working group for further study, and to report back by the next summit in 2013.

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. It was also agreed that the initial contribution to the bank should be substantial and sufficient for it to be effective in financing infrastructure.

During the sixth BRICS Summit in Fortaleza (2014), the leaders signed the agreement establishing the New Development Bank (NDB).

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.

The inaugural meeting of the Board of Governors of the NDB was chaired by Russia and held on the eve of the Ufa Summit on July 7, 2015, when the bank formally came into existence as a legal entity. 

K.V. Kamath was appointed as the president of NDB. Its headquarters is situated in Shanghai. The first regional office of the NDB is in Johannesburg.

Manorama Yearbook app is now available on Google Play Store and iOS App Store