BRICS Bank's first loan will be in Chinese currency: Kamath

The NDB opened in Shanghai on July 21 to finance infrastructure projects

The first loan to be issued by the $100 billion New Development Bank of the five-nation BRICS bloc in April next year would in Chinese currency Renminbi, its President K V Kamath has said.

The NDB will ‘get our first loan approved in April of 2016’, and the first loan will be issued in the Chinese Renminbi, said the eminent Indian banker, who will be the NDB's president for the first five years, at a media interaction on Thursday.

The NDB opened in Shanghai on July 21 to finance infrastructure projects, mainly in Brazil, Russia, India, China South Africa countries -- the emerging economies of Brazil, Russia, India, China and South Africa.

For the first time after he took over as the NDB's President, Kamath on Thursday called on Chinese Premier Li Keqiang, who hailed the opening of the bank as an ‘important step forward’ in cooperation among BRICS countries.

"This is great progress in financial cooperation among developing countries and emerging economies, as well as a helpful supplement to the global financial system," Li had told Kamath.

The NDB will have an initial authorised capital of $100 billion and initial subscribed capital of $50 billion equally shared among the five founders.

In his media interaction at Shanghai, Kamath, the former Independent Director of Infosys and former Chairman of ICICI Bank, said that setting up of the NDB signals ‘the coming of age of the developing countries.’

"Developing countries can now stand on their own feet, and try to organise themselves regarding funding," he was quoted as saying by state-run Xinhua news agency.

He said NDB will work with the China-sponsored Asian Infrastructure Investment Bank on different projects.

"The setting up of NDB. . .the setting up of the AIIB is a statement that we will try to balance some things ourselves rather than borrow from those that could create volatility," Kamath said.

Image: A Chinese bank teller counts currency. Photograph: Reuters