India will hold the presidency of a new bank launched by the BRICS group of emerging powers for six years after the financial institution becomes operations around 2016-17, officials said on Wednesday.
The launch of the bank signals the first serious attempt by the emerging economies of Brazil, Russia, India, China and South Africa to break the stranglehold of western powers over global financial institutions such as the World Bank and the International Monetary Fund.
India’s presidency of the Shanghai-based $100 billion New Development Bank will be followed by Brazil and Russia which will each have five-year terms. The grouping, which met for a summit in Brazil this week, also decided to institute a $100 billion Currency Reserve Arrangement (CRA) to help countries to deal with short-term liquidity pressures.
Indian officials said a period of six months had been provided for ratification of the agreement by the respective parliaments of the member-nations. India doesn’t need such an approval from its parliament. The member-countries then have six months to pay the first of the seven instalments.
Read: BRICS bank: how PM got big powers to accept India's idea
While the five countries will equally share the equity for the new bank, China will contribute the most for the CRA at $41 billion followed by India, Russia, Brazil with $18 billion each and South Africa with $5 billion.
"The vision of a New Development Bank, at the Delhi Summit two years ago, has been translated into a reality, in Fortaleza,” Prime Minister Narendra Modi said after the bank’s launch was announced.
“It will benefit BRICS nations. But will also support other developing nations. And, it will be rooted in our own experiences, as developing countries.”
Brazilian President Dilma Rousseff (C), Russia's President Vladimir Putin(L), Prime Minister Narendra Modi(2L), China's President Xi Jinping(2R) and South Africa's President Jacob Zuma pose for the official photograph of the 6th BRICS summit in Fortaleza, Brazil. (AFP Photo)
The new bank launched, Prime Modi met Russian President Vladimir Putin on the side lines of the summit and called for a deepening of relations between the traditional friends, especially in the areas of defence, nuclear energy, trade and investment.
Modi also invited Putin to visit the Kudankulam nuclear power project in southern India when the latter comes to the country in December for an annual bilateral summit.
Read: Brics bank will restore balance in world financial system, says China
During their 40-minute meeting, Modi sought an easing of the visa regime especially for students, a suggestion that was accepted for consideration by the Russian president.
WATCH: HT explains: What has Modi achieved in his maiden overseas summit BRICS
(With inputs from PTI and IANS)