Leaders from the BRICS countries - Brazil, Russia, India, China, and South Africa - formally launched a joint international development bank on Tuesday July 15th during their annual summit, held this year in the Brazilian city of Fortaleza.
Headquartered in Shanghai, the bank will finance infrastructure and sustainability projects in BRICS and other emerging and developing countries.
The New Development Bank, as it will be called, will have US$100 billion in initial authorised capital at its disposal. The BRICS countries will initially underwrite half that amount - US$50 billion - with each putting forward equal contributions of US$10 billion.
The first chair of the Board of Governors shall be from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank shall be from India. The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters.
BRICS finance ministers have now been directed to work on modalities for bringing the bank into operation.
According to sources, other countries, multilateral institutions, and investment banks could eventually become bank shareholders, though their participation will be subject to BRICS' sign-off.
During the meeting, leaders also signed off on a reserve fund that will help BRICS members deal with actual or potential balance of payments problems, known as the Contingent Reserve Arrangement (CRA).