NDB will build project pipelines by April 2016: Kamath

Road projects in India could be monetised; BRICS-promoted NDB to also be open for equity infusion

The newly created BRICS Bank, which has been renamed as New Development Bank (NDB), is expected to start operations and take up projects by April 2016, nine months after KV Kamath takes over as its president.

It his first statement after taking over as NDB president, KV Kamath, former chairman of ICICI Bank said he hoped to work with BRICS and other member-countries over the next few months so as to build project pipelines by April 2016.

"I am engaged with the government to ensure that there are some Indian projects in the infrastructure space that can be taken up then," he said, while speaking at the CII National Council Meeting here.

Elaborating on how the multilateral bank will be different from other institutions like the World Bank and ADB, Kamath said NDB will have a different mindset that is required for developing countries and it will be a lot more flexible in its operations.

"Its policy mindset will be driven by all stakeholders' and not just the lenders. An important aspect will be with regard to the speed of lending for projects posed to the institution," Kamath said. Speaking about the possibilities for NDB funding in India, Kamath said that road projects in the country could be monetised in addition to providing funding for fresh projects. He said that the former will help remove budgetary strains on the government. NDB seeks to bring in product diversification by introducing capital market products and will be open for equity infusion. Kamath specified that currency diversification would be kept in mind while funding.

"There would be no pro-rating for funding and assistance will be provided to founding countries as well as member countries. The reason that the word BRICS was not included in the name of the bank was that new partner countries may eventually join the BRICS group of emerging economies," he said.

Kamath is expected to move to Shanghai in the third week of July to kickstart the process of building a team and establishing the bank. He also shared that the NDB will have vice-presidents from three other nations. He said that the charter for the bank has been drawn and it will be mostly on the lines of that of World Bank, Asian Development Bank (ADB) and private multilateral lenders. He also said that the bank will enjoy the same privileges as these institutions.

Kamath said that the NDB looks forward to cooperation and not competition with other multilateral development agencies for the common good and clarified that the NDB is not competing with the Asian Infrastructure Investment Bank (AIIB) founded by the Chinese government as it seeks a wider geographical reach.