Honduras President recently requested the country’s admission to the BRICS-led New Development Bank (NDB).
About New Development Bank (NDB):
- NDB, formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS countries (Brazil, Russia, India, China and South Africa).
- Objective: Financing infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
- The idea of setting up NDB was first conceived in 2012 during BRICS Summit in New Delhi, India. The Bank formally came into existence as a legal entity in 2015.
- Headquarters: Shanghai, China
- The first regional office of the NDB was setup in Johannesburg, South Africa. The second regional office was established in 2019 in São Paulo, Brazil, followed by Moscow, Russia.
- Capital: The Bank has an initial authorized capital of 100 billion dollars and an initial subscribed capital of 50 billion dollars.
- Membership in NDB is open to any member of the United Nations.
- Governance Structure:
- The Bank is governed by a Board of Governors made up of the finance ministers of the five BRICS countries, and a Board of Directors.
- Voting power within the Board is based on each country’s shares in the bank.
- While new members can join the NDB, the five BRICS countries will retain a minimum of 55% of total shares.
- The NDB’s management includes a presidency which rotates among BRICS members, and four vice presidents who are selected from the remaining BRICS countries.
Q1) What is a multilateral development bank?
A multilateral development bank (MDB) is an international financial institution chartered by two or more countries for the purpose of encouraging economic development in poorer nations. Multilateral development banks consist of member nations from developed and developing countries. MDBs provide loans and grants to member nations to fund projects that support social and economic development, such as the building of new roads or providing clean water to communities.