A senior Indian official was quoted by the Wall Street journal as saying that the financial authorities from Brazil, Russia, India, China and South Africa have agreed to create the bank with a total capital of $50bn, with equal shareholding among them.
A decision in this context, which also signals the end of Chinese insistence on $100bn capital and a bigger stake for the proposed bank, was taken at a summit held in New Delhi, India, during the first week of August this year.
The group is also mulling an option to provide approximately 40% to 45% stake to non-Brics nations, while offering stake to developed nations such as the US.
It is expected that giving shareholding to the developed economies will enable the bank to get a higher credit rating, subsequently enabling it to raise cheaper funds from the market.
All these issues are expected to be discussed when the group’s finance ministers meet for the annual meetings of the World Bank and International Monetary Fund in Washington between October 11 and 13, the official said.
Originally, the proposal to form a bank cropped up in March 2012, to help gather and organize capital for infrastructure development within the group as well as in other emerging markets.
The BRICS heads of state approved the proposal at their summit held in Durban, South Africa, in March this year, however disagreement over issues, including funding and management are yet to be resolved. It is likely to happen in March 2014 in Brazil.
