India seeks to push ₹25,000 crore bond and expand NDB local-currency lending
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
NDB and de-dollarisation: a key GS3 topic on global financial architecture and infrastructure financing.
Why in news
India is seeking to maximize the New Development Bank (NDB) by pushing a ₹25,000 crore rupee bond and expanding local-currency lending beyond the current ¥7 billion Panda bond.
Background
The NDB was established in 2015 by BRICS countries to mobilize resources for infrastructure and sustainable development. As of the report, the NDB has approved 139 projects worth approximately $43 billion, primarily distributed among its core members.
Facts for Prelims
- FactExpanded BRICS grouping accounts for nearly 40% of global GDP and 55% of the world's population.
- FactBRICS members held 11% of the voting share at the IMF when the grouping formed in 2011.
- BodyNew Development Bank (NDB) was established in 2015 by BRICS countries.
- FactIndia proposes a ₹25,000 crore rupee bond for the NDB.
- FactCurrent NDB local-currency lending includes a ¥7 billion Panda bond.
Prelims practice question
Which international institution was established in 2015 by BRICS countries to fund infrastructure and sustainable development?
- (a)International Monetary Fund
- (b)Asian Infrastructure Investment Bank
- (c)New Development Bank
- (d)World Bank
Show answer
Answer: (c) New Development Bank — The New Development Bank (NDB) was established in 2015 by BRICS countries.
For Mains
Q. Discuss the significance of the New Development Bank (NDB) in reshaping the global financial architecture for emerging economies.
Dimensions to cover in your answer
- Institutional competition: NDB's project approval rate and membership growth compared to the Asian Infrastructure Investment Bank (AIIB)
- Geopolitical balancing: India's strategy to maximize NDB utility while avoiding the Beijing-Moscow de-dollarisation crusade
- Currency diversification: Expanding local-currency lending to reduce reliance on the US dollar in infrastructure financing
Keywords: New Development Bank · BRICS · Local-currency lending · Global financial architecture · De-dollarisation · Infrastructure financing
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