NEW DEVELOPMENT BANK (NDB)

INTRODUCTION
The New Development Bank is a multilateral development bank established by BRICS countries to mobilise resources for infrastructure and sustainable development projects. For beginners in International Relations, NDB helps in understanding alternative development finance institutions created by emerging economies. From an OPSC prelims perspective, NDB is an important static topic because questions are frequently asked on its origin, objectives, membership, structure, and relationship with BRICS.

ORIGIN AND BACKGROUND
• Established in 2014 during the BRICS Summit held in Fortaleza, Brazil
• Started operations in 2015
• Created to complement existing multilateral development banks such as the World Bank and ADB
• Aim was to provide faster and more inclusive development financing

HEADQUARTERS AND REGIONAL OFFICES
• Headquarters: Shanghai, China
• Regional offices established in different member countries
• India hosts the Africa Regional Office of NDB in Gujarat

MEMBERSHIP
• Initially limited to BRICS countries
• Membership expanded to include new members beyond BRICS
• All members have equal voting power within BRICS framework

OBJECTIVES OF NDB
• Finance infrastructure and sustainable development projects
• Promote development cooperation among emerging economies
• Mobilise resources for green and climate-friendly projects
• Support economic growth and development

CORE FUNCTIONS
• Provides loans, guarantees and equity investments
• Focus on infrastructure sectors such as transport, energy, water and urban development
• Emphasis on sustainable and renewable energy projects

CAPITAL STRUCTURE AND GOVERNANCE
• Authorised capital: USD 100 billion
• Initial subscribed capital shared equally by BRICS members
• Board of Governors – highest authority
• Board of Directors – responsible for operations
• President heads the bank on a rotating basis

INDIA AND NDB
• India is a founding member
• India has received funding for infrastructure and renewable energy projects
• India actively participates in governance and policy formulation

CURRENT RELEVANCE
• Expansion of NDB membership
• Increased focus on green financing and climate action
• Use of local currency lending to reduce exchange rate risks

PRELIMS NOTES AND COMMON CONFUSIONS
• NDB is different from AIIB
• NDB is not a replacement for World Bank
• NDB is linked to BRICS but functions independently
• NDB focuses mainly on infrastructure and sustainability

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Subject: International Relation

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