New Development Bank

New Development Bank

Part of: Prelims and GS-II International Relations 

Context  India has welcomed Egypt as the fourth new member of BRICS New Development Bank that was established by the BRICS countries six years ago.

Key takeaways 

• Bangladesh, UAE, and Uruguay joined in September 2021.
• Membership expansion enables New Development Bank to position itself as a premier development institution for emerging economies.
• The New Development Bank aims to mobilize resources for development projects in BRICS, emerging economies, and developing countries.
• The bank is headquartered in Shanghai, China. 

Components of financial architecture of the BRICS:

• New Development Bank: NDB’s key areas of operation are clean energy, transport infrastructure, irrigation, sustainable urban development and economic cooperation among the member countries.
• Contingent Reserve Arrangement: It aims to provide short-term liquidity support to the members through currency swaps to help mitigate the BOP crisis situation and further strengthen financial stability.