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Expansion of bank membership on agenda of BRICS Summit

The summit will suggest BRICS, or the New Development Bank (NDB) board, to consider expansion of membership. Entrants to the Bank could be from Asia, Africa, Eurasia and Latin America. The expansion issue of the Shanghai-headquartered Bank has bee...

, ET Bureau|
Updated: Nov 13, 2019, 07.53 AM IST
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PM Narendra Modi will deliberate on the expansion of BRICS Bank membership to enable funding of projects beyond five countries of the group.
NEW DELHI: The 11th BRICS Summit in Brasilia on Wednesday-Thursday in the presence of Prime Minister Narendra Modi will deliberate on the expansion of BRICS Bank membership to enable funding of projects beyond five countries of the group.

The summit will suggest BRICS, or the New Development Bank (NDB) board, to consider the issue of expansion of membership, ET has learnt. New entrants to the Bank could be from Asia, Africa, Eurasia and Latin America.

The expansion issue of the Shanghai-headquartered Bank has been on the agenda of BRICS members in the run-up to the summit, officials told ET. The expansion in the membership of the Bank may further deter the idea of expanding the core BRICS membership.

After the BRICS summit, consultations are planned between five BRICS countries and accession candidates for NDB, officials indicated. The technical details of the accession of the new members will be discussed at the technical level with the participation of the Bank’s board.

A regional strategy in the expansion of NDB’s membership also enables the Bank to exploit the potential synergies that exist between NDB’s financial instruments and the regional mechanisms that may complement and amplify the effects of the bank’s project financing.

A platform for the cooperation of regional development banks and funds where BRICS countries are members could be created, ET has learnt. This platform of regional development banks could comprise Eurasian Development Bank (EDB), the Development Bank of South Africa (DBSA), the SAARC Development Fund (SDF), Mercosur Structural Convergence Fund (FOCEM), China Development Bank (CDB) and China-ASEAN Investment Cooperation Fund (CAF). EDB has an existing arrangement with NDB.

The BRICS+ format may serve as a platform for bringing together the bulk of the countries of the Global South in areas of cooperation that span continental connectivity, trade, investment and assistance for purposes of sustainable development.

During the sixth BRICS Summit in Fortaleza (2014), five leaders signed the agreement establishing the NDB. The first and current president of NDB is KV Kamath.

According to Articles of Agreement of the New Development Bank, the initial authorised capital of the bank is divided into 1 million shares, having a par value of $100,000. Each founding member of the bank has initially subscribed 100,000 shares, in a total of $10 billion, of which 20,000 shares correspond to paid-in capital, in a total of $2 billion and 80,000 shares correspond to callable capital, in a total of $8 billion. As of March 6, 2019, the NDB board of directors approved 30 projects with loans aggregating over approx. $ 8 billion

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