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NEW DELHI: Prospects for the BRICS’ New Development Bank opening an office in India have brightened, with a joint statement drawn up by the five member countries of the grouping talking of a regional centre opening up in the country this year.

India is the last among the five countries in the BRICS grouping to host a regional office of the New Development Bank (NDB). The first regional centre was opened in South Africa in 2017, with the second coming up in Brazil in 2018 and the third in Russia opening up in 2019. China hosts the headquarters of the NDB in Shanghai.

BRICS groups together Brazil, Russia, India, China and South Africa.

According to Indian officials, there were “procedural issues" delaying the regional office from being opened in India that was not due to any impediments or stalling by BRIC members.

India is the chair of the BRICS grouping for 2021 and foreign minister S Jaishankar hosted his counterparts from BRICS countries in a virtual meeting on Tuesday. A joint statement issued by all five countries after the meeting said that BRICS “noted with appreciation the role of the New Development Bank (NDB) in infrastructure and sustainable development financing and the Emergency Assistance Facility to combat the (covid-19) pandemic. They welcomed the establishment of NDB’s Eurasian Regional Centre in Russia and looked forward to the opening of NDB’s regional office in India in 2021."

“They also commended the progress made towards the Bank’s membership expansion and encouraged the timely admission of new members," it said.

The NDB is a different model from western financial institutions like the Washington- based World Bank or the International Monetary Fund, said former foreign secretary Kanwal Sibal. Having a regional office in India will help the NDB evaluate country level projects nearer home, he said. Regional offices in NDB member states will allow more balanced distribution of development projects with member states themselves in charge of evaluating the projects and involved in the decision making, he said.

It was at the fourth BRICS Summit in New Delhi in 2012 that the leaders of Brazil, Russia, India, China and South Africa considered the possibility of setting up a new Development Bank to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies, besides in developing countries. In 2013, BRICS leaders who met in South Africa agreed on the feasibility of establishing the New Development Bank. It was also agreed that the initial contribution to the Bank should be substantial and sufficient for it to be effective in financing infrastructure.

During the sixth BRICS Summit in Fortaleza in 2014, the leaders signed the Agreement establishing the New Development Bank (NDB) against the backdrop of emerging markets and developing countries facing face significant financing constraints to address infrastructure gaps and sustainable development needs.

“With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies," said the BRICS joint statement of 2014 after the leaders’ summit hosted by Brazil in Fortaleza. “Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth," the Fortaleza statement said.

The NDB was set up with an initial authorised capital of $100 billion with an initial subscribed capital of $50 billion, shared equally among founding members. The 2014 summit had also agreed to the signing an agreement for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of $100 billion.

The NDB’s first president was KV Kamath of India who stepped down in 2020 after a five-year term. Marcos Troyjo of Brazil is the president now. The NDB has so far approved 14 Indian projects for an amount of nearly $4.2 billion. In 2020, the NDB approved 19 loans, adding $10.3 billion to its loan book, which totalled $24.4 billion at the end of 2020, a 63.6% increase year-on-year.

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