India to name first BRICS Bank president

India will nominate the first president for the BRICS bank, to be called New Development Bank (NDB). Russia and Brazil will select the chair of the board of governors and the chair of the board of directors, the other top officials of the bank, according to a statement from the BRICS leaders who have gathered in the northeastern city of Fortaleza.

Leaders of the BRICS grouping at their meeting in Brazil on Tuesday announced the signing of an agreement establishing the New Development Bank (NDB), which will mobilise resources for infrastructure and sustainable development projects in Brazil, Russia, India, China, South Africa (BRICS) and other emerging and developing economies.

The New Development Bank will be based in Shanghai, China and will have regional offices across all five BRICS nations.

The bank, with an initial capital of $50 billion will supplement the work of multilateral financial institutions such as the World  Bank and the International Monetary Fund (IMF).

NDB will have an initial authorised capital of $100 billion and an initial subscribed capital of $50 billion, which will be equally shared among founding members.

The New Development Bank Africa Regional Center will be established in South Africa concurrently with the headquarters. Finance ministers of BRIC countries have been asked to work out the modalities for its operationalisation.

''NDB will strengthen cooperation among the 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,'' a declaration issued at the end of the BRICS summit said.

The NDB 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, the declaration stated.

BRICS also announced the signing of a treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial capital of $100 billion.

''This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our finance ministers and central bank governors.

The agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures, it stated.

BRICS also signed a memorandum of understanding MoU) on cooperation among export credit and guarantees agencies of all five members that will improve the support environment for increasing trade opportunities among the countries.

The declaration also announced the conclusion of the cooperation agreement on innovation within the BRICS Interbank Cooperation Mechanism.

The grouping also agreed to exploit the potential for BRICS insurance and reinsurance markets and to pool capacities. ''We direct our relevant authorities to explore avenues of cooperation in this regard,'' it said.

Member countries of BRICS said sustainable development and economic growth will be facilitated by taxation of revenue generated in jurisdictions where economic activity takes place.

''We express our concern over the harmful impact of tax evasion, transnational fraud and aggressive tax planning on the world economy. We are aware of the challenges brought by aggressive tax avoidance and non-compliance practices. We, therefore, affirm our commitment to continue a cooperative approach on issues related to tax administrations and to enhance cooperation in the international forums targeting tax base erosion and information exchange for tax purposes'', it said.

The countries said the relevant authorities will explore ways of enhancing cooperation in this area and directed tax authorities to strengthen cooperation in the field of customs.

BRICS expressed serious concern over the non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness.

''The IMF reform process is based on high-level commitments, which already strengthened the Fund's resources and must also lead to the modernization of its governance structure so as to better reflect the increasing weight of EMDCs in the world economy.

''The Fund must remain a quota-based institution. We call on the membership of the IMF to find ways to implement the 14th General Review of Quotas without further delay. We reiterate our call on the IMF to develop options to move ahead with its reform process, with a view to ensuring increased voice and representation of EMDCs, in case the 2010 reforms are not entered into force by the end of the year,'' it added.

BRICS called on members of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas, so as not to further jeopardise the postponed deadline of January 2015.

The leaders welcomed the goals set by the World Bank Group to help countries end extreme poverty and to promote shared prosperity, but they said the potential of this new strategy will only be realised if the institution and its membership effectively move towards more democratic governance structures, strengthen the bank's financial capacity and explore innovative ways to enhance development financing and knowledge sharing while pursuing a strong client orientation that recognises each country's development needs.

''We look forward to initiating the work on the next shareholding review at the World Bank as soon as possible in order to meet the agreed deadline of October 2015.''

They also called for an international financial architecture that is more conducive to overcoming development challenges. ''We have been very active in improving the international financial architecture through our multilateral coordination and through our financial cooperation initiatives, which will, in a complementary manner, increase the diversity and availability of resources for promoting development and ensuring stability in the global economy'', they added.