Brazil, Russia, India, China and South Africa (BRICS) have decided to set up BRICS Development Bank. The decision was taken by BRICS countries in the Summit held in Fortaleza, Brazil on July, 15, 2014.

The BRICS nations have signed the agreement to establish the New Development Bank. The designated signatories of the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China and the Republic of South Africa signed the Inter-Governmental Agreement on July 15, 2014 at Fortaleza Brazil, to establish the New Development Bank.

The major objectives behind setting-up this Bank are as under:

• to utilize resources at its disposal to support infrastructure and sustainable development projects, public or private, in the BRICS and other emerging market economies and developing countries, through the provision of loans, guarantees, equity participation and other financial instruments;
• to cooperate as the Bank may deem appropriate, within its mandate, with international organisations, as well as national entities whether public or private, in particular with international financial institutions and national development banks;
• to provide technical assistance for the preparation and implementation of infrastructure and sustainable development projects to be supported by the Bank.

The Bank will be an additional source of long term finance for infrastructure projects in India. In addition, such a Bank will also be instrumental for increasing economic cooperation among BRICS countries, which will ensure more productive use of resources among BRICS countries including India.

The Bank will be established after each signatory country has deposited with the Government of the Federative Republic of Brazil an instrument setting forth that it has accepted, ratified or approved this Agreement in accordance with its own laws.

This information was given by the Minister of State for Finance, Smt. Nirmala Sitharaman in written reply to a question in Lok Sabha.

Establishment of a regional development bank to finance infrastructure and sustainable development projects across member states. The BRICS signatories executed an intergovernmental agreement to establish the New Development Bank to support public and private infrastructure and sustainable development projects through loans, guarantees, equity participation and other financial instruments, to cooperate with international and national entities within its mandate, and to provide technical assistance; establishment is conditional on each signatory depositing an instrument of acceptance, ratification, or approval in accordance with its domestic law.