Shanghai: The New Development Bank (NDB) floated by the BRICS nations, including India, to step up infrastructure funding in the emerging economies formally started its operations at its headquarters here today.
Chinese Finance Minister Lou Jiwei, Shanghai Mayor Yang Xiong and the bank's President K V Kamath attended the opening ceremony held in a hotel in Shanghai.
Kamath, 67, will be the bank's President for the first five years.
The NDB will supplement the existing international financial system in a healthy way and explore innovations in governance models, Lou said at a seminar following the ceremony.
BRICS economies - Brazil, Russia, India, China and South Africa - launched the multi-billion dollar development bank at the 7th BRICS summit held in the Russian city of Ufa on July 8 amid efforts to finance infrastructure projects, mainly in member countries.
The NDB will have initial capital of USD 50 billion, which will be expanded to USD 100 billion within the next couple of years.
Each BRICS member will contribute an equal share in establishing a startup capital.
The NDB was conceived as a counterbalance to Western-led financial institutions like the World Bank and the IMF by providing funding for infrastructure and development projects in BRICS countries. Each nation will have an equal say in the bank's management, regardless of GDP size, according its officials.
The NDB is also backed by the China-floated USD 50 billion Asia Infrastructure Investment Bank (AIIB) in which India and 56 other countries have joined.
The World Bank welcomed the opening of NDB. "We would like to congratulate Mr K V Kamath, President of the New Development Bank, and the founding members - Brazil, Russia, India, China, and South Africa - on this important occasion," World Bank President Jim Yong Kim said in a statement.
"We are committed to working closely with the New Development Bank and other multilateral institutions, offering to share our knowledge and to co-finance infrastructure projects. These types of partnerships will be essential to reach our common goals to end extreme poverty by 2030, boost shared prosperity, and to reduce inequalities," Kim said.