Chinese Parliament initiates process to ratify BRICS Bank
June 24, 2015, 1:51 pm

BRICS heads of state and government: Vladimir Putin, Prime Minister of India Narendra Modi, President of Brazil Dilma Rouseff, President of the People’s Republic of China Xi Jinping and President of South Africa Jacob Zuma in Brisbane, Australia on 15 November 2014 [PPIO]

The Chinese Parliament will ratify the Bank in the next step, said Chinese Vice Finance Minister Shi Yaobin in Beijing on Wednesday.

India, Brazil, South Africa and Russia have already ratified the Bank.

Once the agreement is approve by the NPC Standing Committee, the Chinese government will inject $10 billion as prescribed, Shi said. Hong Kong will not initially be within the ambit of the BRICS Bank agreement, the Chinese Finance Ministry said after consulting with the regional administration.

“The establishment of the bank will be a milestone in financial cooperation among BRICS members. Aside from its main funding function, it will help enhance the bloc’s role in the international arena and promote reform of global economic governance,” said the Chinese Vice Finance Minister.

The BRICS New Development Bank will be launched at the first session of its Board of Governors in Moscow on 7 July, Russian officials have confirmed.

The BRICS Bank will have initial authorized capital of $100 billion, and its initial subscribed capital of $50 billion will be equally shared among founding members, under the agreement.

It will stipulate a three-tier governance structure — a board of governors, a board of directors and management led by the president.

India has already nominated the first BRICS Bank President, Kundapur Vaman Kamath.

The New Development Bank will provide a financing alternative to the World Bank, where the five large emerging markets have sought more clout.

BRICS leaders also announced the establishment of the BRICS Contingent Reserve Arrangement, a 100-billion-dollar fund from which the BRICS member countries will be allowed to draw funds when going through a crisis.

The bank is set to be headquartered in Shanghai.

Brazil’s envoy to the IMF and newly announced BRICS Bank Vice President , Paulo Nogueirga Batista, said at the BRICS Business forum last week in Russia that the BRICS are “not fully satisfied with the international financial architecture, not fully satisfied with the role that our countries are allowed to have at the IMF and the World Bank”.

“Our countries are very active in IMF….We work together at the IMF… Despite this active involvement in the Washington institutions, our countries have begun to realize that we need to do our own thing,” said Batista.

TBP and Agencies