The four issues that were open for discussion on the BRICS bank were the location of the bank, its presidency, shareholding rights and location.
The BRICS bank is an idea originally conceived by India. Every BRICS member is certain that such a bank is the need of the hour, particularly with the Bretton Woods institutions such as the World Bank and the IMF failing to give adequate representation to developing nations over the last many decades, the official said.
Towards this end, India has ensured that all countries have equal shareholding in the bank with equal contribution to the capital.
Equal shareholding is a fait accompli now. Nobody wants BRICS Bank to end up like the Bretton Woods institutions, said the official.
South Africa, which was originally pitching for the presidency, has now withdrawn. South Africa sees in India an ally at the World Trade Organisation talks, particularly in areas of agriculture, concessions to least developed countries and non-binding issues. It has backed Indias presidency in the BRICS bank.
However, as far as project costs are concerned, they would be based on a formula depending on the economic weights of the member countries. We have a large number of new big projects. We will gain, an official said, without giving further details.
The bank, which PM Narendra Modi preferred to refer to as the New Development Bank in his departure statement in New Delhi, will be capitalised at $50 billion with each member country chipping in $10 billion over the next seven to eight years.
India, under the previous UPA government, had agreed to China basing the banks headquarters in Shanghai.
We fought hard for the presidency. We will get it, the official said, without willing to be named in the crucial hours of negotiation.
The VI BRICS Summit in Brazil is likely to announce the setting up of the bank in its declaration.
- P Vaidyanathan Iyer