India has named ICICI Bank chairman KV Kamath as the first president of the New Development Bank being set up by the BRICS countries. The $100 billion development bank will fund infrastructure projects in developing nations. To be headquartered in Shanghai, it was agreed to be headed by an Indian for the first five-year term.
"Kamath has been appointed as the head of the BRICS bank, the appointment will become effective when he becomes free from his current assignments," Finance Secretary Rajiv Mehrishi told reporters in New Delhi on Monday.
The BRICS group of emerging market economies – Brazil, Russia, India, China and South Africa – agreed to set up the NDB last July to reshape the Western-dominated international financial system.
67-year old Kamath is a veteran private banker who was credited with developing ICICI Bank into India's second-largest lender. He headed the bank for 13 years until 2009. According to The Hindu, he is credited with nurturing the country’s top female bankers, including ICICI Bank’s current head Chanda Kochhar.
Kamath is currently the non-executive chairman of the bank as well as of Infosys, India's second-biggest software services exporter. He is expected to step down from both positions to take up the NDB presidency.
"Kamath's deep understanding and diverse experience of financial markets, particularly the banking industry, make him a natural choice to head the Brics development bank," Shikha Sharma, chief executive at Axis Bank, told The Economic Times.
The NDB will start with an initial paid-in-capital of $50 billion, with each BRICS country contributing $10 billion. The bank will also have a $100-billion currency reserve arrangement (CRA) for helping out countries facing short-term liquidity pressures.
Since it was announced, however, the focus of the international financial system has shifted to China’s parallel initiative, the Asian Infrastructure Investment Bank (AIIB).