Loan requests from BRICS to Kamath

Ufa (Russia), July 9 (IANS) Clarifying that all BRICS Bank member-nations are on par, New Development Bank’s first president K.V. Kamath on Thursday said the loan requests from member-nations would be examined in the order they were received.

The bank should not only meet the group’s aspirations at present, but also prepare for a larger BRICS once new members joined, he added.

BRICS is an acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.

“We will look at the proposals from each country in the order in which they are coming,” Kamath told TASS news agency.

“We realise we will need to work with other partners, to meet aspirations in terms of loans and other assistance for not only our BRICS member-countries as of now, but an increased number of members as it happens. So that will be laid out in our policy as we go along,” he said.

The NDB expects to start providing its first loans by April 2016, according to Kamath, who resigned last month as the non-executive chaiman of ICICI Bank, so as to take up his BRICS assignment.

“By April next, we want to make our first loans, so we will have to build teams to identify projects, build simultaneously internal processes and procedures, hire people and then get to the funding process,” Kamath said.

The ratification process, which ended on July 7 in Moscow, allowed the bank to move forward and start working, according to Kamath.

“As of now, technically, I have a white sheet of paper with only the names of my four vice-presidents. Everybody else has to be hired,” Kamath said.

For the first three months, the bank will seek help from member-countries’ local development banks, he said.

“I’ve started the process of consulting with our own development bank partners; in fact, I was having meetings just now, to hire one-two-three people from each of the countries,” he said.

“The recruitment will be purely merit-based from across our member-countries,” Kamath said.

The five BRICS countries represent almost three billion people, or approximately 40 percent of the world population, and have a combined GDP of $16.039 trillion or 20 percent of the gross world product.

Explaining that the NDB would look for maintaining the leverage between equity and debt, Kamath said the bank would engage in both equity raised from the member-states, as well as debt raised from the markets.

“Long-term lending follows this model…you have your parent capital, and you can leverage that typically two to three times as debt,” he said

“If you fully bring in your parent capital, you have another $200-300 billion, and you could do lending of $300-400 billion. That will happen over a period of time,” the NDB head added.

 

 

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