New Development Bank Will be Operational from April 2016
With a well defined focus towards Infrastructure projects, SMEs, sustainable and clean energy projects, development of smart cities and PPP, the New Development Bank (NDB) is all set to enter into India.
New Development Bank (NDB), initially known as the BRICs bank is expected to roll out its operations and take up projects by April 2016, barely nine months after Mr K V Kamath takes over as the President of the multilateral development institution in July at Shanghai. NDB, founded by the BRICS nations-Brazil, Russia, India, China and South Africa- which has opted for a larger canvas by expanding its scope of operations to other member nations.
Speaking at the CII National Council Meeting held at Mumbai on Thursday, said Mr KV Kamath, president of NDB, said, “I hope to work with BRICS and other member countries over the next few months so as to build project pipelines by April 2016. I am engaged with the government to ensure that there are some Indian projects in the infrastructure space that can be taken up then.” Mr Kamath was the Past President CII (2008-09) and was awarded the Padma Bhushan in 2008.
Elaborating on how the multilateral bank will be different from other institutions like the World Bank and ADB Mr Kamath said NDB will have a different mindset that is required for developing countries and it will be a lot more flexible in its operations. “Its policy mindset will be driven by all stakeholders’ and not just the lender’s. An important aspect will be with regard to the speed of lending for projects posed to the institution.” NDB seeks to bring in product diversification by introducing capital market products and will be open for equity infusion. Mr Kamath specified that currency diversification would be kept in mind while funding.
There would be no pro-rating for funding and assistance will be provided to founding countries as well as member countries. The reason that the word BRICS was not included in the name of the bank was that new partner countries may eventually join the BRICS group of emerging economies,” while speaking at the CII National Council Meeting held in Mumbai on 25 June 2015.
Mr Kamath is expected to move to Shanghai in the third week of July 2015 to kick-start the process of building a team and establishing the bank. He also shared that the NDB will have Vice Presidents from three other nations. Mr Kamath said that the Charter for the bank has been drawn and it will be mostly on the lines of that of World Bank, Asian Development Bank and private multilateral lenders. He also said that the bank will enjoy the same privileges as these institutions.
Speaking about the possibilities for NDB funding in India, Mr Kamath said that road projects in the country could be monetized in addition to providing funding for fresh projects. He said that the former will help remove budgetary strains on the Government.
Mr Kamath said that the NDB looks forward to co-operation and not competition with other multilateral development agencies for common good. He also clarified that the NDB is not competing with the Asian Infrastructure Investment Bank (AIIB) founded by the Chinese Government as it seeks a wider geographical reach. Mr Kamath said that the bank will surely seek to co-operate with the AIIB on large-ticket projects. Referring to the global economic scenario, he said that the strengthening of the Southern region’s economies, balance sheets and surpluses are changing equations and this is where a bank rooted in the region can understand its ethos, mindsets and needs. He added that huge opportunities are expected to arise for government, private sector and banks in the region.