SHANGHAI: A new $100 billion international bank dedicated to the emerging BRICS countries opened in China’s commercial hub Shanghai on Tuesday, officials said, as an alternative to other multilateral lenders.
The “New Development Bank,” backed by the so-called emerging BRICS nations Brazil, Russia, India, China and South Africa, has been viewed as a challenge to Washington-based institutions.
The NDB’s website explicitly describes it as an “alternative to the existing US-dominated World Bank and International Monetary Fund” which will address needs for infrastructure and sustainable development.
It comes as Beijing — which is seeking a greater role on the global political stage to mirror its rise to become the world’s second-largest economy — is also setting up a separate Asian Infrastructure Investment Bank (AIIB).
Chinese Finance Minister Lou Jiwei played down the competitive aspect.
“The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models,” he told the NDB’s opening ceremony in Shanghai, as quoted by the official Xinhua news agency.
The bank says on its website that it will have authorised capital of $100 billion, with $50 billion paid in initially.
Xinhua quoted bank president K. V. Kamath, formerly a private banker in India, as saying the institution’s management was “working on initiation of operations,” including “making business policy” and “developing project preparations.”
Operations would begin late this year or early in 2016, he added.
The opening comes two weeks after a BRICS summit hosted by Russian President Vladimir Putin.
Moscow — which has suffered huge currency fluctuations and struggled to attract investors since the outbreak of the crisis in Ukraine — sees the bank and a BRICS currency reserve pool as alternative global financial institutions.
At the time of the summit, Russian Foreign Minister Sergei Lavrov said in a statement that BRICS “illustrates a new polycentric system of international relations” demonstrating the increasing influence of “new centers of power.”