The New Development Bank (NDB), set up by the five BRICS nations officially opened for business on Tuesday. The Shanghai, China-based bank, led by India's K V Kamath, its first head, will now start taking up infrastructure projects for financing, mainly in five emerging economies, the official Xinhua News Agency said.
The bank has initial authorised capital of $100 billion and subscribed capital of $50 billion, shared equally among its five founding members - Brazil, Russia, India, China and South Africa.
China's finance minister Lou Jiwei, Shanghai Mayor Yang Xiong and bank president KV Kamath attended the opening ceremony.
Kamath, 67, who will be the bank's president for the first five years, said he was confident of delivering on people's expectations from the new bank.
"Countries should closely cooperate," Kamath, a former executive with India's largest private sector lender ICICI Bank, said.
"We will listen carefully to our members and try to offer tailor-made services for them," he said.
The bank will function on the lines of the IMF and the World Bank, but unlike the Bretton Woods institutions, which assign votes based on capital share, the New Development Bank has assigned one vote to each participant country, and none of the countries will have veto power.
Leaders of the five countries have repeatedly emphasised that the New Development Bank would complement rather than compete with the IMF and the World Bank
BRICS leaders, meeting in Brazil in July 2014, signed an agreement to set up the bank, which was formally inaugurated earlier this month. The bank will begin actual operations at the end of this year or early next year, according to Xinhua.
China has spearheaded the creation of another international infrastructure bank - the Asian Infrastructure Investment Bank (AIIB) - which also aims to promote infrastructure development in emerging countries.
The New Development Bank and the AIIB would complement each other and demonstrate how emerging economies can improve global infrastructure and overhaul economic governance around the world, Xinhua quoted Lou as saying.