NDB has had great start, will lend only to BRICS: Kamath
15 October 2016
New Development Bank (NDB) President K V Kamath has said the Beijing-based institution will lend over a $1 billion this year and hopes to raise this to about $2.5 billion next year.
In an interview with Business Standard, he said the BRICS Bank, as it is popularly called, will come out with rupee-denominated bonds next year in offshore markets.
Amid demand for more capital infusion in India's public sector banks, Kamath said interest rate cuts and consequent correction in bonds would lead to gains for these lenders. He said a year or 18 months down the line, investments will pick up in India, but not through lending.
On the challenges of building a new organisation, the former ICICI Bank chief said, ''It's a start-up … when ICICI was built, I had a core team from which it was scaled up, not built up. The superstructure was there, we had to only scale it up. Here you had to start from the foundation.
''Having said that, we received tremendous cooperation from the Chinese government. They provided all the start-up material that you require, including people. Other member-countries came in, including support from several banks and institutions and governments. All of this allowed us to get off the ground quickly.
''We set a target that we would be in the business in the first year, lend and raise money in the first year. I think we were able to do all three.''
He said NDB has lent a little over $900 million so far, of which around $250 million has gone to India.
''We will do some more this year. I don't want to put a number because the board has to meet next month. So, it will be well over a $1 billion for the current year. Next year, we are setting a target of roughly doubling it to $2.5 billion,'' he said.
On the lending focus, Kamath said in the first year the focus was on green and renewable energy because ''that underscores our objective of sustainable development and infrastructure. But we will venture into more areas of sustainability in the coming years.''
Asked if the bank would lend beyond BRICS members and what would be focus areas, he said, ''We will lend just to BRICS. As for areas, I think water becomes key habitat conservation; roads, urban rejuvenation and environmental issues relating to cities are important. There is a wide variety within a sustainable platform.''