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A joint statement issued at the end of the Durban Summit confirmed that the initial capital contribution to the bank should be substantial and sufficient for the bank to be effective in financing infrastructure.
But Storchak told the upper house of Russia’s parliament that although BRICS finance ministers have already met four times to work out the bank’s logistics, they have yet to find consensus on how much each country will contribute.
Russia had suggested equal division – 20 per cent of the operating fund to be financed by each of the five BRICS members.
“After numerous attempts, we were able to agree that the process of building up the capital … will be stretched over time,” Storchak said following meetings of BRICS finance officials on the sidelines of the G20 conference which recently concluded in Sydney, Australia.
“We managed to come to an agreement that the period of contributions to the capital’s share can be up to five years,” he added.
The establishment of the BRICS Development Bank is largely seen as the first significant step for the bloc of five, but details of where the bank will be located and other issues are yet to be finalised.
In a previous exclusive interview, Storchak acknowledged the challenges ahead:
What is done is the political decision taken by the leaders that the creation of the bank is viable and reliable. That’s the only sign that we have at this stage. We will have to discuss lots of different things starting from the level of capital.
Kirill Dmitirev, the head of the Russian Direct Investment Fund, says the BRICS Bank is likely to deal with two primary trajectories – infrastructure and projects of high synergy effect.
India Prime Minister Manmohan Singh has identified the BRICS Development Bank and the $100 billion Contingency Reserve Arrangement as major efforts “to support trade and investment and reduce risks in emerging markets”.
It is not clear yet, whether the bank will be financing investment projects in the five BRICS states or whether it will expand to other emerging markets.
The BRICS Post with inputs from agencies