BRICS moves to establish bank institute, rating agency

BRICS countries on Friday discussed the efficacy of “establishing” a bank institute and a rating agency of their own following the New Development Bank (NDB) becoming fully operational. BRICS finance ministers and central bank governors met here on the sidelines of the Annual Spring meeting of the International Monetary Fund and the World Bank, for a discussion chaired by Finance Minister Arun Jaitley.

BRICS comprises five emerging economies - Brazil, Russia, India, China and South Africa. “Deliberations were held on efficacy of establishment of New Development Bank Institute and BRICS rating agency,” a media release said. “It was decided that a technical working group would examine the issues in detail,” a statement said. The findings of the technical group would be presented to BRICS finance ministers and central bank governors in their next meeting, it added.

During the meeting, Jaitley complimented K V Kamath, NDB president, and his team for the quick pace with which the bank has commenced its operations, a sentiment which was thereafter echoed by other members of the Board of Governors of NDB.

The Board of Governors of NDB noted that the bank has commenced operations through approval of its maiden projects on April 13. The NDB which commenced operations in July, 2015, is headquartered in Shanghai and its initial authorised capital is $100 billion. So far, the NDB has approved four green renewable energy projects from India, China, Brazil and South Africa entailing bank financing of $811 million. The project from India entails provisioning of a multi-tranche loan of $250 million to Canara Bank for lending to renewable energy ventures.

The project will result in generation of 500 mw of renewable energy and savings of about 800,000 tonnes of carbon emissions. Jaitley also held a bilateral meeting with Lou Jiwei, finance minister of China. The two discussed areas of mutual collaboration and commonality of their positions in various multilateral fora. Jaitley is currently on an official tour to Washington to attend the annual Spring Meetings of the IMF and the World Bank, Board of Governors meeting of New Development Bank and other associated meetings.