NEW DEVELOPMENT BANK
Basics and Backgrounds
- It is a multilateral development bank operated by the BRICS states(Brazil, Russia, India, China and South Africa).
- The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013.
- It was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.
- The bank is set up to foster greater financial and development cooperation among the five emerging markets.
- 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.
- The bank will be headquartered in Shanghai, China.
- Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and none of the countries will have veto power.
- V. Kamath, from India, is the first elected president of the NDB. He was replaced as president by Marcos Prado Troyjofrom Brazil since 7 July 2020. Marcos Troyjo was elected president of the New Development Bank on 27 May 2020
- Fostering development of member countries.
- Supporting economic growth.
- Promoting competitiveness and facilitating job creation.
- Building a knowledge sharing platform among developing countries.
- The New Development Bank is a partner in development that goes beyond the conventional codes of multilateral banks. It represents, operates and is recognized for its values that fulfil the founding vision.
- The Agreement on the New Development Bank entered into force in July 2015, with the official declaration of all five states that have signed it. The five founding members of the Bank include Brazil, Russia, India, China and South Africa.
- Bank’s Articles of Agreement specify that all members of the United Nations could be members of the bank, however the share of the BRICS nations can never be less than 55% of voting power.
- Expanding the NDB’s membership is considered by some experts to be crucial to its long-term development by helping boost the bank’s business growth.
- According to the Bank’s General Strategy: 2017–2021, the NDB plans to expand membership gradually so as not to overly strain its operational and decision-making capacity.
5th Annual Meeting of Board of Governors of New Development Bank
- India 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.
- The country 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 COVID-19 pandemic.
- Lauding efforts of the NDB in establishing itself as a credible Global Financial Institution, India said it should take appropriate actions to join G-20 forum along with other Multilateral Development Bank (MDBs)/ International Financial Institutions (IFIs).
Measures taken by India to respond to COVID-19 crisis
- Creating a COVID-19 Emergency Fund
- Allocation of $2 billion (Rs 15,000 crore) by the government for strengthening the healthcare system.
- Announcement of a scheme of social support measures amounting to $25 billion (Rs 1.70 lakh crore) to alleviate the hardship of the poor and the vulnerable.
- Insurance cover of $67,000 (Rs 50 lakh) per person to over 2.2 million frontline health workers and others provision of relief to firms in statutory and regulatory compliance matters.
- Easing of monetary policy by the Reserve Bank of India.
- Supplying critical medicine to the needy countries to tackle the COVID-19.
NDB Approved Projects in India:
Canara Bank Renewable Energy Financing Scheme
Madhya Pradesh Major District Roads Project
Madhya Pradesh Multi Village Water Supply Project
Rajasthan Water Sector Restructuring Project
Bihar Rural Roads Project
Madhya Pradesh Bridges Project
Madhya Pradesh Major District Roads II Project
Mumbai Metro Rail Project
Assam Bridge Project
Andhra Pradesh Road Sector Project