New Development Bank (NDB)

BRICS built its own lender in 2014. It still gets confused with a completely different BRICS agreement, signed on the very same day.

What Is the New Development Bank?

BRICS nations wanted their own project lender. The NDB is that lender.

• The New Development Bank (NDB) is BRICS’s own multilateral lender. It is not linked to APEC or any other grouping.
• The NDB is headquartered in Shanghai, China.
• Its purpose is financing infrastructure and sustainable development projects, across BRICS nations and other emerging economies.

When and Where Was the NDB Created?

The NDB was born at a single summit. It took another year to actually start working.

• The Agreement on the New Development Bank was signed on 15 July 2014, at the VI BRICS Summit, in Fortaleza, Brazil.
• There are 5 founding members: Brazil, Russia, India, China, and South Africa.
• The Agreement entered into force in July 2015, at the VII BRICS Summit, in Ufa, Russia.
• The Bank approved its first loans in 2016. By year-end, 7 infrastructure projects were approved, worth over $1.5 billion.

How Is Voting Power Decided at the NDB?

Voting power at the NDB follows one clear rule. It is not based on population or economic size.

• Voting power at the NDB is tied to each member’s subscribed capital, not to population or GDP directly.
• Each of the 5 founding members holds an equal 20% share.
• Even as new members join, BRICS nations must together keep at least 55% of total voting power. This is fixed under the Bank’s founding Agreement.

How Has the NDB Grown Since 2014?

The NDB hasn’t stayed a 5-country club. It has also changed how it lends.

• The NDB pushes local-currency lending, to cut foreign-exchange risk for itself and its borrowers. It has already issued bonds in Chinese yuan and South African rand.
• Since 2021, the NDB has expanded beyond its 5 founders. It has admitted Bangladesh, the UAE, Uruguay, and Egypt as new members.
• The NDB is distinct from, and complementary to, older institutions like the World Bank Group and the Asian Development Bank. It is not a direct replacement for either.

Is the NDB the Same as the Contingent Reserve Arrangement?

Two BRICS agreements were signed the very same day. They are not the same instrument.

• The NDB and the Contingent Reserve Arrangement (CRA) were both agreed at the same 2014 Fortaleza summit. They are often confused, but they are structurally separate.
• The NDB finances individual projects. The CRA is instead a $100 billion currency-swap pool among BRICS central banks, for balance-of-payments support.
• Under the CRA, commitments differ sharply by country: China committed $41 billion, Brazil, Russia, and India committed $18 billion each, and South Africa committed $5 billion.

Was the NDB Set Up by APEC?

This exact trap has already appeared in a UPSC paper. The answer is no, it wasn’t APEC.

• UPSC CSP 2016 (GS Paper I, Q67) directly tested this fact. A statement claiming NDB was “set up by APEC” is false.
• The NDB was set up by BRICS, not APEC. Its headquarters claim, Shanghai, is true.

What Has the NDB Been Doing in 2026?

2026 has been a big year for the NDB, centred on India’s BRICS Chairship. Several milestones landed in a single September week.

• India hosted the 18th BRICS Summit in New Delhi, from 12 to 13 September 2026.
• On 13 September 2026, the NDB’s Board of Governors approved its General Strategy for 2027-2031.
• On 10 September 2026, the NDB priced a RMB 7 billion Panda Bond, with 3-year and 5-year tranches.
• In May 2026, India’s pension regulator, PFRDA, made NDB’s planned rupee-denominated bonds an eligible NPS investment. The NDB is still preparing its first-ever rupee bond in India, aiming to raise roughly $400-500 million.