Brasil, Russia, India, China and South-African Republic set up their own development bank

On Tuesday, July 14, 2014, the leaders of five countries of BRICKS group – Brasil, Russia, India, China and South-African Republic signed a contract on development bank set up and urgent reserve fund. The bank will be headquartered in China and on of the regional branches will be in Africa.

The President of Russia, Vladimir Putin, Indian Prime Minister, Narendra Modi, Brasilian President, Dilma Rousseff, Chinese President Xi Jinping and South-African President, Jacob Zuma signed the contract.

The bank capital will be equally shared between the countries –participants. The bank will be headquartered in Shanghais and the first president of the bank will be from India. For the beginning, the bank will start with USD 50 billion of starting capital.

The emergent reserve fund will have USD 100 billion and will serve as a support to the countries to “avoid short-term liquidity pressures, to strengthen global financial, security network and to be a supplement to the existing international engagements.”

BRICS group criticized the World Bank and the International Monetary Fund that developing countries do not have adequate right to vote which the New Development Bank (NDB) should provide through providing help for infrastructure projects.

- Based on healthy banking systems, NDB will strengthen cooperation between our countries and contribute to efforts of multilateral and regional financial institutions in the global development process – it was stated in the announcement after the meeting at Fortaleza, the city in the southeast Brazil.