Brics Nations To Create $100bn Development Bank

The leaders of the five Brics countries - Brazil, Russia, India, China and South Africa have signed a deal to create a new $100bn (£58.3bn) development bank and emergency reserve fund.

Indian Prime Minister Narendra Modi, Presidents Vladimir Putin of Russia, Xi Jinping of China, Jacob Zuma of South Africa and Dilma Rousseff of Brazil.

The announcement about the bank and a $100billion Currency Reserve Arrangement (CRA) that will help countries to deal with short-term liquidity pressures was made on Tuesday night July 15,2014 at the conclusion of the 6th BRICS Summit in Fortaleza, Brazil

The capital for the bank will be split equally among the five participating countries.

The bank will have a headquarters in Shanghai, China and the first president for the bank will come from India

At first, the bank will start off with $50bn in initial capital. The bank will begin with a subscribed capital of $50 billion divided equally between its five founders, with an initial total of $10 billion in cash put in over seven years and $40 billion in guarantees. It is scheduled to start lending in 2016 and be open to membership by other countries, but the capital share of the BRICS cannot drop below 55%

The emergency reserve fund - which was announced as a "Contingency Reserve Arrangement" - will also have $100bn, and will help developing nations avoid "short-term liquidity pressures, promote further Brics cooperation, strengthen the global financial safety net and complement existing international arrangements".
The creation of the Brics bank will almost surely create competition for both the World Bank and other similar regional funds