China ratifies Brics bank agreement

BEIJING: China’s top legislature yesterday ratified an agreement on the founding of the Brics New Development Bank (NDB), which will fund infrastructure projects in the bloc and other developing economies.

The approval was given at the bi-monthly session of the National People’s Congress Standing Committee, which ran until yesterday.

The agreement was signed by the bloc’s five members – Brazil, Russia, India, China and South Africa – on July 15 last year during the sixth Brics summit.

It will enter into force only when all Brics countries have submitted documents of acceptance, ratification or approval.

The Shanghai-based NDB will have initial authorised capital of 100 billion US dollars (R1 220bn), and its initial subscribed capital of 50 billion US dollars will be equally shared among the founding members.

It will have a three-tier governance structure – a board of governors, a board of directors, a president and vice-presidents.

As agreed by the five countries, the first chair of the board of governors will be nominated by Russia, the first chair of the board of directors by Brazil, and the first president by India.

They also agreed to set up an NDB African regional centre in South Africa.

The board of governors is expected to hold its first meeting on July 7 in Russia to appoint members of the board of directors and the management led by the president, according to the Ministry of Finance.

The NDB is expected to launch late this year or early next year.