The BRICS bloc of large emerging economies have agreed on the capital structure for a proposed development bank that aims to reduce their reliance on Western financial institutions, the Wall Street Journal reported.
Officials from Brazil, China, India, Russia and South Africa agreed to set up the bank with a total capital of $50 billion, shared equally among them, it quoted an unnamed senior Indian government official as saying.
The decision was made at a meeting in New Delhi in the first week of August, the newspaper said.
The move would likely end disagreements over the funding and management of the bank as China had earlier proposed a total bank capital of $100 billion and sought a bigger share, it said.
The bank would support the financing needs in emerging and developing nations for roads, modern-day port facilities, and reliable power and rail services.
Officials have previously said the BRICS aimed to inject an initial $50 billion into the bank, but there was disagreement over whether each state should contribute $10 billion or if contributions should vary by the size of their economies.
China’s economy is about 20 times the size of South Africa’s and four times as big as Russia’s or India’s.
Other key issues, such as proposals within the group to offer a stake to developed nations, needed further discussion, the Indian official said. The group is considering offering a stake of 40-45% to non-BRICS nations, the official added.
That would help the bank get a higher credit rating and enable it to raise cheaper funds from the market, the newspaper said.
The bloc has yet to make a decision on where the bank would be located, the official added.
Those issues are likely to be discussed when finance ministers from the group meet on the sidelines of the annual meetings of the World Bank and International Monetary Fund in Washington in October, the official added.
The five countries represent a fifth of global GDP but have struggled to find common ground that would convert their economic weight into joint political clout.