BRICS New Development Bank to work on commercial principles - Russian diplomat

MOSCOW, March 30. /TASS/. The New Development Bank, which the BRICS grouping of leading emerging economies (Brazil, Russia, India, China and South Africa) are establishing, will be a banking institution based on deriving profit, Russian Foreign Ministry Ambassador-at-Large Vadim Lukov said on Monday. The agreement on the multilateral development bank seen as an alternative to the US-dominated World Bank and International Monetary Fund was signed in mid-July 2014 at the 6th BRICS summit in Fortaleza, Brazil. The BRICS New Development Bank will have an authorized capital of $100 billion. Russia’s Finance Ministry has said it expects the New Development Bank to start working by late 2015 and reach full-scale operations in 4-5 years. "The opinion of the shareholders [of the BRICS New Development Bank] is that all projects should be profitable. This is not a mutual aid fund or a grant-issuing office. The New Development Bank will be built on commercial principles," said Lukov who is the Russian Foreign Ministry’s coordinator for BRICS issues. Compared with the Asian Infrastructure Investment Bank, which is primarily focused on Asia, the BRICS New Development Bank will deal with projects in the grouping’s five countries, as well as projects in other countries in a proportion of two to one, the Russian diplomat said. Moscow expects the BRICS Development Bank’s president and board of directors to be appointed before a BRICS summit in Ufa in the Urals in July 2015, he said. "All personnel decisions should be passed in the second half of the year," Lukov said. Under an agreement between the BRICS countries, the Bank’s first president will be from India and the first chairman of the board of directors will be from Brazil while a representative of Russia will be the first chairman of the bank’s board of governors. The bank will be headquartered in Shanghai, China. Read more