K V Kamath first BRICS bank Prez
Eminent banker K V Kamath will be the first president of $100 billion BRICS Bank which will provide infrastructure loans to emerging nations, rivalling multilateral lenders such as World Bank and IMF. Kamath, 67, will have a five year term at the bank, which is likely to be operationalised within one year as ‘New Development Bank’ being set up by the five nation grouping, BRICS, Finance Secretary Rajiv Mehrishi said.
“The appointment will be effective when he becomes free from his current assignment. I think he is on some boards. It may take couple of days,” he said. Kamath is the non-executive Chairman of the India’s largest private sector bank ICICI Bank. Besides, he is also the non-executive chairperson of the IT bellwether Infosys. “There is no final decision on his tenure. But it is likely to be 5 years. We got ratification from President of India,” he said, adding it has to be ratified by all the member nation.
Leaders of the emerging economies of Brazil, Russia, India, China and South Africa (BRICS) had last year reached an agreement to establish the New Development Bank, with its headquarters in Shanghai. As per the agreement, India got the right to nominate the first president. The BRICS nations account for nearly $16 trillion in GDP and 40 per cent of the world’s population.
India is hoping to get more funds for infrastructure development from BRICS bank, he said. The bank will start with an initial paid-in-capital of $50 billion with each BRICS country contributing $10 billion, while its authorised capital is $100 billion. Equal capital contribution has been decided so that the development bank does not fall into the ownership pattern of IMF and the World Bank, with a distorted shareholding.
After serving at ICICI for more than a decade, Kamath had moved to Asian Development Bank, Manila, in the Private Sector department in 1988. His principal work experience at ADB was in various projects in China, India, Indonesia, Bangladesh and other emerging nations.
The decision to set up this multilateral funding agency was taken in Fortaleza, Brazil at the BRICS Summit which was attended by Prime Minister Narendra Modi. The idea of the BRICS development bank was conceived in Delhi in 2012 and approved in Durban in 2013. Making a strong pitch for speeding up the creation of the BRICS development bank, Modi had said last year that India hopes to ratify the agreement over the financial institution by 2014-end, and 2016 should be set as the target for its inauguration.
Modi had made this remark at an informal meeting with Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Chinese President Xi Jinping and South African President President Jacob Zuma on the sidelines of the G20 summit at Brisbane (Australia) in November. India’s presidency will be followed by Brazil and Russia who will have five years term each under an agreement reached after intense negotiations among the five country-grouping.
The term ‘BRIC’ was coined in 2001 by the then chairman of Goldman Sachs Asset Management, Jim O’Neill, in his publication Building Better Global Economic BRICs.
The foreign ministers of the initial four BRIC states (Brazil, Russia, India, and China) met in New York City in September 2006 at the margins of the General Debate of the United Nations General Assembly, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 June 2009.
The entry of South Africa into the group added the ‘S’ component to BRIC, turning it into BRICS.