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New Development Bank
The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS nations (Brazil, Russia, India, China, and South Africa). According to the agreement, "the bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments" and "shall cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the bank."
The initial authorized capital of the bank was US$100 billion divided into one million shares having a par value of US$100,000 each. The initial subscribed capital of the bank was US$50 billion divided into US$10 billion in paid-in shares and US$40 billion in callable shares. It was equally distributed among the five founding members–Brazil, Russia, India, China, South Africa. The agreement on the NDB specifies that each founding member will have one vote and that no member would have any veto powers.
The bank is headquartered in Shanghai, China. The first regional office of the bank was opened in Johannesburg, South Africa in 2016. Subsequently, regional offices were established in São Paulo in Brazil, Ahmedabad in India and Moscow in Russia.
The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in New Delhi. As the establishment of a development bank would help in simplifying mutual settlement and lending operations amongst the BRICS nations, reducing dependence on the US dollar and the Euro, the leaders of these nations agreed to set up anew multilateral development bank at the 5th BRICS summit held in Durban, South Africa on 27 March 2013. On 15 July 2014, on the first day of the 6th BRICS summit held in Fortaleza, Brazil, the five member states signed the agreement on the New Development Bank, which made provisions for the legal basis of the bank. In a separate agreement, a reserve currency pool worth US$100 billion was set up by the members.
On 11 May 2015, K. V. Kamath was appointed as the first president of the bank. According to the bank, the policies and procedures for all functional areas were approved at the board of directors meeting in January 2016. On 27 February 2016, the NDB signed an agreement with the Government of China and local government of Shanghai to establish the headquarters of the bank in Shanghai. On 19 July 2016, the NDB reported that it successfully issued the bank's first green financial bond with issue size of RMB 3 billion, with a tenure of five years in the China interbank bond market.
On 20 July 2016, the first annual meeting of the NDB board of governors was held in Shanghai. The participants of the meeting discussed the bank's future work and development and gave a positive assessment to the bank's work. At the meeting, the first green financial bond issuance in renminbi was highlighted as a milestone event for the NDB. In 2016, the NDB board of directors approved the first set of projects in all members of the bank. On 21 December 2016, the NDB signed its first loan agreement. The NDB received AA+ credit ratings from S&P Global Ratings (S&P) and Fitch Ratings (Fitch) in August 2018, which enables the bank to offer full suite of financial products to its public and private sector clients. In April 2020, the New Development Bank established an Emergency Assistance Facility that sought to finance costs related to the fight against the Coronavirus and soften the blow from the economic impact. In addition to committing US$5 billion to this cause, the NDB targeted to provide up to 10 billion dollars.
In March 2022, the NDB announced that "sound banking principles" required that all new transactions with Russia be put on hold. Even though the NDB quickly cut ties with Russia, Fitch Ratings still downgraded the NDB from stable to negative on its Long-Term Issuer Default scale. In May 2022, the New Development Bank set up a regional office in India in the state of Gujarat with the goal of financing and observing infrastructure projects in both India and Bangladesh. In May 2023, Saudi Arabia expressed its intention to join the NDB.
According to the Articles of Agreement, the main organs of the bank are:
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New Development Bank
The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS nations (Brazil, Russia, India, China, and South Africa). According to the agreement, "the bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments" and "shall cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the bank."
The initial authorized capital of the bank was US$100 billion divided into one million shares having a par value of US$100,000 each. The initial subscribed capital of the bank was US$50 billion divided into US$10 billion in paid-in shares and US$40 billion in callable shares. It was equally distributed among the five founding members–Brazil, Russia, India, China, South Africa. The agreement on the NDB specifies that each founding member will have one vote and that no member would have any veto powers.
The bank is headquartered in Shanghai, China. The first regional office of the bank was opened in Johannesburg, South Africa in 2016. Subsequently, regional offices were established in São Paulo in Brazil, Ahmedabad in India and Moscow in Russia.
The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in New Delhi. As the establishment of a development bank would help in simplifying mutual settlement and lending operations amongst the BRICS nations, reducing dependence on the US dollar and the Euro, the leaders of these nations agreed to set up anew multilateral development bank at the 5th BRICS summit held in Durban, South Africa on 27 March 2013. On 15 July 2014, on the first day of the 6th BRICS summit held in Fortaleza, Brazil, the five member states signed the agreement on the New Development Bank, which made provisions for the legal basis of the bank. In a separate agreement, a reserve currency pool worth US$100 billion was set up by the members.
On 11 May 2015, K. V. Kamath was appointed as the first president of the bank. According to the bank, the policies and procedures for all functional areas were approved at the board of directors meeting in January 2016. On 27 February 2016, the NDB signed an agreement with the Government of China and local government of Shanghai to establish the headquarters of the bank in Shanghai. On 19 July 2016, the NDB reported that it successfully issued the bank's first green financial bond with issue size of RMB 3 billion, with a tenure of five years in the China interbank bond market.
On 20 July 2016, the first annual meeting of the NDB board of governors was held in Shanghai. The participants of the meeting discussed the bank's future work and development and gave a positive assessment to the bank's work. At the meeting, the first green financial bond issuance in renminbi was highlighted as a milestone event for the NDB. In 2016, the NDB board of directors approved the first set of projects in all members of the bank. On 21 December 2016, the NDB signed its first loan agreement. The NDB received AA+ credit ratings from S&P Global Ratings (S&P) and Fitch Ratings (Fitch) in August 2018, which enables the bank to offer full suite of financial products to its public and private sector clients. In April 2020, the New Development Bank established an Emergency Assistance Facility that sought to finance costs related to the fight against the Coronavirus and soften the blow from the economic impact. In addition to committing US$5 billion to this cause, the NDB targeted to provide up to 10 billion dollars.
In March 2022, the NDB announced that "sound banking principles" required that all new transactions with Russia be put on hold. Even though the NDB quickly cut ties with Russia, Fitch Ratings still downgraded the NDB from stable to negative on its Long-Term Issuer Default scale. In May 2022, the New Development Bank set up a regional office in India in the state of Gujarat with the goal of financing and observing infrastructure projects in both India and Bangladesh. In May 2023, Saudi Arabia expressed its intention to join the NDB.
According to the Articles of Agreement, the main organs of the bank are: