India, 20 Others Set Up Asian Infrastructure Investment Bank
Beijing: India along with 20 other countries signed an agreement to become founding members of the China-backed Asian Infrastructure Investment Bank (AIIB) to aid the infrastructure development in the Asian region and reduce the dependence on Western-dominated World Bank and IMF.
Usha Titus, Joint Secretary, Economic Affairs division of the Ministry of Finance, signed the MoU on behalf of India at a special ceremony here at the Great Hall of the People.
China's Vice Finance Minister Jin Liqun, who was also the former Vice-President of the Asian Development Bank, has been appointed as the Secretary General of AIIB.
The Bank, to be headquartered in Beijing, is expected to be operational by next year.
The MoU specifies that the authorised capital of AIIB is USD 100 billion and the initial subscribed capital is expected to be around USD 50 billion.
The paid-in ratio will be 20 per cent.
Voting rights are to be decided after consultations among the members over fixing the bench marks which were expected to be combination of GDP and Purchasing Power Parity (PPP).
Based on this formula, India will be second largest share holder of the bank after China.
Elaborating on decision to participate in AIIB, Titus said India's view is that the new bank provides rich resource capital base for infrastructure financing, which is good for the regional development.
It will help to bridge the infrastructure deficit by playing a complimentary role along with other financial institutions like ADP and IMF and work for good governance.
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