After holding top posts like Non-Executive Chairman of country’s largest private sector bank ICICI Bank and Non-Executive Chairperson of IT bellwether Infosys, eminent banker KV Kamath added another feather in his cap. Kamath will head as the President of $100-billion BRICS Bank which will provide infrastructure loans to emerging nations, rivalling multilateral lenders such as World Bank and IMF. As per the agreement, Kamath will be the first President of the bank.
Kamath, 67, will have a five-year term at the bank, which is likely to be operationalised within one year as ‘New Development Bank’ being set up by the five nation grouping, BRICS, Finance Secretary Rajiv Mehrishi said, adding that the appointment will be effective when he becomes free from his current assignment, because I think he is on some boards and it may take couple of days.
leaders of the emerging economies of Brazil, Russia, India, China and South Africa (BRICS) had last year reached an agreement to establish the New Development Bank, with its headquarters in Shanghai. As per the agreement, India got the right to nominate the first president. The BRICS nations account for nearly $16 trillion in GDP and 40 per cent of the world’s population.
When asked about the tenure of Kamath, Mehrishi said, “There is no final decision on his tenure. But it is likely to be 5 years. We got ratification from President of India,” he said, adding that it has to be ratified by all-the-member nation.
India is hoping to get more funds for infrastructure development from BRICS bank, he said. The bank will start with an initial paid-in-capital of $50 billion with each BRICS country contributing $10 billion, while its authorised capital is $100 billion.
Equal capital contribution has been decided so that the development bank does not fall into the ownership pattern of IMF and the World Bank, with a distorted shareholding.
After serving at ICICI for more than a decade, Kamath had moved to Asian Development Bank, Manila, in the Private Sector department in 1988. His principal work experience at ADB was in various projects in China, India, Indonesia, Bangladesh and other emerging nations. The decision to set up this multilateral funding agency was taken in Fortaleza, Brazil at the BRICS Summit which was attended by Prime Minister Narendra Modi.
The idea of the BRICS development bank was conceived in Delhi in 2012 and approved in Durban in 2013. Making a strong pitch for speeding up the creation of the BRICS
Development Bank, Modi had said last year that India hopes to ratify the agreement over the financial institution by 2014-end, and 2016 should be set as the target for its inauguration.
Modi had made this remark at an informal meeting with Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Chinese President Xi Jinping and South African President President Jacob Zuma on the sidelines of the G20 summit at Brisbane (Australia) in November.
India’s presidency will be followed by Brazil and Russia who will have five-year term each under an agreement reached after intense negotiations among the five country-grouping.