'Bank, CRA will help BRICS nations to tap market potential'

Terming the BRICS countries move to set up a development bank and contingent reserve arrangement as an "exhilarating outcome", China's official media today said the two new financial arrangements will help member nations to tap market potential and diversify exports.
"The exhilarating outcome is due to the joint efforts from BRICS members to deepen their economic cooperation and tap their potential by innovative means and methods," said a commentary by state-run Xinhua news agency titled 'BRICS development bank meets the call for fairer global financial order'.
The BRICS development bank and the Contingency Reserve Arrangement (CRA) are expected to help the BRICS countries tap their market potential and diversify exports along with offering more options for them when developing their economies while avoiding risks, the commentary said.

The two mechanisms will also serve as useful subsidies to the World Bank and the International Monetary Fund (IMF), so as to strengthen the international financial system, making it a more balanced and just one, it said.
The decision dispels any doubts about member countries' determination to form such a bank, and shores up investors' trust in the capacities of the emerging economies, the commentary said.
The bank is expected to facilitate trade, enhance financial ties, tackle tax-related challenges and tap the cooperation potential in more fields, it said.

The bank to be headed by an Indian with headquarters in Shanghai, will have an initial authorised capital of USD 100 billion and its initial subscribed capital of USD 50 billion will be equally shared among founding members.

The shared portion means each member country shoulders equal responsibility and their cooperation is based on an equal footing from the start, the Xinhua commentary said.
The bank also eyes the less developed countries in Africa, with an African regional centre of the bank to be set up in South Africa.