Fortaleza: In a major victory for India,the BRICS Summit Tuesday night decided to establish the new development bank with an initial authorised capital of USD 100 billion for which the initial subscribed capital will be equally shared by the founding members, a point New Delhi emphasised to prevent by domination by anyone of the members.
The new development bank's Africa regional centre will be established in South Africa and currently with the headquarters.
"We direct our Finance Ministers to work out the modalities for its operationalisation," the leaders said in the Fortaleza Declaration adopted at the Summit.
India's insistence on the equal sharing of the initial subscribed capital was based on the premise that BRICS bank should not fall into the practices of the Bretton Woods institutions like the IMF and the World Bank dominated by the United States.
Hailing the establishment of the bank and the CRA, Modi said in the plenary session that the bank would now benefit not only the member-nations but also the developing world.
The two institutions would now be a new instrument of safeguarding the economic stability in the context of the great international financial volatility.
He said there was a great need for reforms of the UN Security Council and international financial institutions to reflect the ground realities and to create a new financial architecture.
The agreement on the new development and the CRA was signed by ministers from five countries, including Minister of State for Finance Nirmala Sitharaman in the presence of Modi and Presidents of China, Russia, South Africa and host Brazil.
The Declaration said BRICS as well as other emerging markets and developing countries continue to face significant financing constraints to address infrastructure gaps and sustainable development needs.
It is in this backdrop that one has to seed the signing of the agreement for establishing the new development bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies, it said.
Based on sound banking principles, the Declaration said the bank will strengthen cooperation among BRICS countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus "contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth".