India wins race for BRICS Bank top post

Fortaleza: India will be the first President of the $100 billion BRICS Development Bank while the first chair of the Board of Governors will be from Russia. The headquarters of the bank will be Shanghai, not New Delhi, as India desired. And the initial subscribed capital will be $50 billion, to be equally shared by the founding-members.

“The proposal of new development bank at the summit two years ago has already been constituted into reality. We also support other developing nations (through the bank). It will be rooted in our own explanation of developing countries,” Prime Minister Narendra Modi said.

The new development bank’s Africa regional centre will be established in South Africa and currently with the headquarters. “We direct our Finance Ministers to work out the modalities for its operationalisation,” the leaders said in the Fortaleza Declaration adopted at the Summit.

India’s insistence on the equal sharing of the initial subscribed capital was based on the premise that BRICS bank should not fall into the practices of the Bretton Woods institutions like the IMF and the World Bank dominated by the US.

Hailing the establishment of the bank and the CRA, Modi said in the plenary session that the bank would now benefit not only the member-nations but also the developing world. The two institutions would now be a new instrument of safeguarding the economic stability in the context of the great international financial volatility.

There was a great need for reforms of the UN Security Council and international financial institutions to reflect the ground realities and to create a new financial architecture. Noting that it is his first BRICS Summit, Modi said he looks forward to working with the leaders and building from personal bonds in the days to come.

BRICS entered the second cycle of Summits on Tuesday at a time when instability is growing in many regions. For a climate of peace and stability, it calls for newer levels of cooperation, he said. “I believe for the first time an institution like BRICS brings together a group of nations on the basis of future potential rather than existing prosperity. The very idea is forward-looking. BRICS must provide a united, clear basis for a peaceful and stable world”, the Prime Minister said.

The agreement on the new development and CRA was signed by ministers from five countries, including Minister of State for Finance Nirmala Sitharaman in the presence of Modi and Presidents of China, Russia, South Africa and host Brazil.