BRICS agree development bank's structure, details to be worked out
02 September 2013
Emerging major economies Brazil, Russia, India, China and South Africa have tentatively agreed on the structure of the proposed BRICS development bank, with initial capital of $50 billion.
But the grouping is yet to sort out details of the bank's location and individual stake holdings.
Details like holding of shares, payment of capital, location of the bank and the bank's management are yet to be decided and may take months of negotiations, Russian deputy finance minister Sergei Storchak said.
BRICS officials at their meeting in early August had agreed that the bank's capital should come from three payment categories, including subscriptions, but the establishment of the development bank aimed at providing funds for infrastructure projects in developing countries has been delayed amidst disagreement over funding and management of the institution.
"We must assume that the bank will not start functioning as fast as one could imagine," Storchak said. "It will take months, maybe a year."
"These are systemic themes, complicated, negotiations are difficult," he said, adding that he hoped for some decisions to be made soon.
BRICS leaders are expected to meet, in an unofficial format, on the sidelines of the summit of the Group of 20 developed and developing nations this week in Russia's St Petersburg, Storchak said.
The divergent group, united only by their stages of economic development, have been struggling to take coordinated action amidst a flight of capital from Brazil, Russia, India, China and South Africa.
Meanwhile, India is seeking support from other emerging economies for coordinated intervention in offshore foreign exchange market after the rupee shed over a fifth of its value against the dollar in the past three months.
While Brazil has rejected outright involvement in any intervention other major emerging economies, including Russia, did not comment.