The New Development Bank (NDB), set up by the BRICS group of nations,  has admitted the United Arab Emirates, Uruguay and Bangladesh as the first batch of new members as part of its expansion drive.

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 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.

How was the NDB formed?

• 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.

• Marcos Prado Troyjo from Brazil is the current president of NDB.

• Since the beginning of its operations, NDB has approved about 80 projects for all of its members, totaling a portfolio of $30 billion. Projects in areas such as transport, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development are within the scope of the Bank.

New member countries

• NDB’s membership expansion is in line with the bank’s strategy to be positioned as the premier development institution for emerging economies.

• NDB’s Board of Governors authorised the bank to conduct formal negotiations with prospective members in late 2020. After a round of successful negotiations, NDB approved the admission of the United Arab Emirates (UAE), Uruguay and Bangladesh as its first new member countries.

• Once admitted, a country’s membership to NDB becomes effective when it completes its domestic processes and deposits the instrument of accession.

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