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There is plenty of room for the New Development Bank (NDB) and AIIB for funding and these new multilateral funding agencies provide challenge to old institutions, World Bank Group President Jim Yong Kim said.
"There are two new banks, Asian Infrastructure Investment Bank (AIIB) and NDB, if you look at the need for infrastructure development for the world, its around USD 1-1.5 trillion every year. So, if you put all the development banks together, we don't come close to meeting that demand," he told reporters here.
"There is plenty of room for New Development Bank and AIIB. I think it is good that the new institutions providing a challenge for groups like us. We have to now redefine what our specific advantages are and we have to get better at what we are doing," it said.
He, however, said it is a matter of having knowledge of all best example of successful developmental projects and bring it to the client because World Bank is truly global and there is all kind of different things that it can do that the NDB will take sometime.
Kim said that the World Bank would continue to have relationship with all such multilateral institutions.
"We expect to have a very productive working relationship with them and we meet 3-4 times a year heads of all multilateral development bank and this year I made sure the presidents of both the banks join the groups," he said.
The World Bank chief also said the successful creation of new funding institutions gives hopes that multilateralism is going to stay even when there is a threat of Brexit.
"With all attacks on multilateralism as I mentioned I think it's extremely important for developed countries in the world to embrace multilateral institutions like the United Nations and development banks like world bank and so we are very grateful that India continues to reach out to us," he added.
Asked about quota reform, Kim said there would be some clarity on different issues related with it next year as it is very complex mechanism.
"When I took the charge that a capital increase with voice reforms, with new safeguards, with greater flexibility and how to use added capital, none of those things individually are possible...We have been able to bring things from far of impossible to almost completion," he said.
"My hope and expectations are we will get (quota reform) there. I hope everyone recognises that this is a victory for multilaterals, this is a victory for countries working together and those are the kind of victories that we need very much right there," he added.
Talking about complexities with regard to quota reform,
Kim said, "the World Bank is a cooperative of 189 countries and we have safeguards and different voices in the organisation. We have questions on capital increase, implication of capital increase. These are very complicated issues."
On capital increase, he said, "We think that we should be bigger. We are running out of capital actually, we have so much business. So we have put to the board that we need a capital increase and if we have a capital increase, we'll be able to lend to India even more."
India has been the strongest proponent of capital increase at the world bank group for quite sometime, he added.
On the condition of domestic banking sector which is facing mounting bad loans, he said, it is obvious that there are NPA issues.
"The government has given the right attention, lot of work has been done by the RBI. Public sector Banks have been adequately provisioned... That process should continue," he said.
Banking sector has a significant impact on economic activity and it is important to have a banking sector that is well capitalised, especially when you have an economy growing at 7.6 per cent, he added.