Brazil, Russia, India, China and South Africa to create BRICS bank institution
Brazil, Russia, India, China and South Africa, members of the BRICS association, plan to create its own bank. In late May, countries were able to agree on the terms of participation in the financial institution. BRICS participant-states agreed on equal equity participation in the project. Earlier this condition was disagreed by China: Beijing offered to distribute shares depending on the volume of GDP each. Thus, China would get a larger share. However, Beijing had to abandon that idea.
BRICS bank will have a starting capital of $ 50 billion, 10 billion of which to be invested in cash by the participating countries. Under the terms the capital increase possible upto $ 100 billion over five years. Brazil, Russia, India, China and South Africa apart from cash deposit will also provide additional guarantees for $ 40 billion, which will allow them to raise funds on the international capital markets.
The last unsolved issue regarding the establishment of the bank is the location of the BRICS bank headquarters. India intend to place bank in this country, new Delhi government is also seeking an Indian citizen to be the first president of the future financial institution became.
According to experts, the BRICS bank at the monent has not yet sufficient means and power to become a rival to the IMF and other transnational financial giants.
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