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BRICS members likely to have equal shareholding in new bank

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The BRICS Summit, Prime Minister Narendra Modi's first multilateral engagement, commenced here today amid an understanding that the 5-member nations will have equal shareholding in the proposed USD 50 billion BRICS Development Bank which India had been strongly pressing for.

The new Indian leader joined Presidents Vladimir Putin of Russia, Xi Jinping of China, Jacob Zuma of South Africa and Dilma Rousseff of Brazil at the grouping's sixth summit at this seaside Brazilian city to deliberate on global economic, political and strategic issues.

Modi, wearing a light maroon bandh gala suit, was received at the Convention Centre by Rousseff with a warm shakehand. The two chatted briefly before posing for photos.

The day-long summit began with a private working session which will be followed by a working lunch and a preliminary session. A Fortaleza Declaration containing the outcome of the meeting is expected to be issued at the end of it.

Working behind the scenes, senior officials from member countries had prepared the ground for their leaders to agree on details of the bank which will finance infrastructure and development projects in BRICS nations. Indian sources said that there was an understanding that each country would have a shareholding of USD 10 billion.

India had been insisting that the shareholding should be equal so that no one country dominates as was the case of institutions like the World Bank and the IMF where the US and Japan enjoy considerable clout.

While India was also pressing for the bank's headquarters to be located in New Delhi, indications are that it will be based in Shanghai. Modi's suggestion that the bank be named the New Development Bank may be accepted. 

The summit is also likely to establish a Contingent Reserve Assistance (CRA) of another USD 50 billion that will be an additional line of defence available to the BRICS countries in situations of balance of payment difficulties.

The idea of establishing a development bank was conceived in Delhi in 2012 and approved in Durban last year.

BRICS accounts for more than a quarter of the world's land mass, 40 per cent of its population and a combined GDP of USD 24 trillion. The summit theme, "Inclusive Growth; Sustainable Development", will enable India to shape the post-2015 Development Agenda being discussed in the United Nations, Modi had said in his departure statement.

"I also look forward to our discussions to further advance intra-BRICS economic cooperation and our collective efforts to advance global economic stability and prosperity," the Prime Minister had said. "These initiatives will support growth and stability in BRICS and also benefit other developing countries," he said.

Participating in the BRICS summit here and capital Brasilia on July 15 and 16 at the invitation of Rousseff, the Prime Minister in his departure statement said India attached high importance to the BRICS Forum for promoting global economic growth, peace and stability. The summit will also provide an opportunity to Modi to interact with a number of leaders of South American countries at a meeting being hosted by Brazil.

Observing that India has traditionally enjoyed close, cordial and mutually beneficial ties with these countries, the Prime Minister had said, "We share common aspirations and challenges. The Indian Diaspora in these countries also serves as the continent's enduring link with India." "South America's all round progress makes it a potentially important pole of the global economy and a land of enormous opportunities for us. My interactions would enable us to explore new ideas on further consolidating and expanding our ties with South America," he had said.

Indian delegation attending the BRICS Summit included Minister of State for Finance Nirmala Sitharaman and National Security Adviser A K Doval

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