Bangladesh acquires 1.0pc stake of New Development Bank

| Updated: September 20, 2021 11:20:43

File photo, (Collected) File photo, (Collected)

Bangladesh finally attains 1.0- per cent share in the Shanghai-based New Development Bank (NDB) as the country has been offered one of three fortunate shareholders after the five founding BRICS nations.

Officials said Saturday -- close on the heels of the China-sponsored bloc's summit -- that Dhaka is now taking preparation to pay its subscription to the NDB, formerly known as BRICS Bank.

Earlier, the Shanghai-based multilateral bank had offered Bangladesh some 0.76-per cent share as a new member after the five founding members -- Brazil, Russia, India, China and South Africa (BRICS).

A senior Ministry of Finance (MoF) official gave the latest developments, saying: "If other United Nations member-countries join the bank, the share of Bangladesh would ultimately reach 0.42 per cent."

Another MoF official said Dhaka will have to pay some $400 million in the next seven years for becoming a shareholder of the bank.

The board of the Shanghai-based multilateral development lender approved membership of three countries -- Bangladesh, the United Arab Emirates and Uruguay.

Bangladesh then negotiated with the lender for getting 1.0-percent stake in the newly established BRICS bank.

Finance Minister AHM Mustafa Kamal at a meeting with NDB President Omarcos Troyjo in February last sought at least 1.0-percent stake.

Another MoF official said: "We are now working to prepare the 'Instrument of Accession (IoA)' to the NDB. When the NDB will accept our IoA, then Bangladesh will formally be a member of the NDB."

Besides, they are waiting for NDB notice for paying the subscription fees for the regular share and for the callable share, he added.

The bank of the newly emerging economies, including the second-largest world economy, China -- boasts an authorized capital of US$100 billion, which is divided into 2.0 million shares that have a par value of US$100,000 each.

The NDB's founding members made an initial subscription of 500,000 shares totaling US$50 billion, which include 100,000 thousand shares corresponding to a paid-in capital of US$10 billion and 400,000 shares corresponding to a callable capital of US$40 billion.

The initial subscribed capital was equally distributed amongst the founding members of BRICS nations. Membership of the Bank is open to members of the United Nations.

According to the NDB plan, the BRICS countries would offload 49-percent shares among the aspirant countries.

The MoF official said Bangladesh's effort to strengthen the South-South cooperation would also get a boost by joining the Shanghai-based lending agency.

In 2016, Bangladesh joined the China-led Asian Infrastructure Investment Bank (AIIB).

The Beijing-based lender has been financing many projects in Bangladesh in several sectors, such as power, transportation, water supply and sanitation.

After the independence of Bangladesh in 1971, many multilateral and bilateral donors, including the World Bank, the Asian Development Bank, Japan, the Islamic Development Bank, UKAID, and USAID, have provided loans and grants for developing the country's infrastructure and reducing hunger.

In December 2019, India's Prime Minister Narendra Modi invited his Bangladeshi counterpart, Sheikh Hasina, to join the bank.

As part of its expansion effort, the NDB has finalised its membership policy and begun the process of drafting the new membership rule.

After adopting a policy where any members of the United Nations can apply for the NDB membership, each member-state would be required to nominate two countries in the bank.

The expansion of membership was also raised in the virtual BRICS Summit held in November 2020.

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