At BRICS, India must bank on the NDB

The New Development Bank is BRICS’s main multilateral financing institution. Brazil, Russia, India, China and South Africa created it in 2015 to mobilise resources for infrastructure and sustainable development projects. Its intended reach includes BRICS members, emerging markets and developing countries.

The bank lends for projects such as metro systems and the Delhi-Ghaziabad-Meerut RRTS corridor. India alone has secured commitments of nearly $10 billion across 32 projects. The NDB also prefers lending in members’ local currencies, alongside larger dollar-based operations.

Its role matters because it gives emerging economies another source of development finance. Yet its scale remains limited. It has approved 139 projects worth about $43 billion, while only about $20 billion had been disbursed. India therefore wants BRICS to make the NDB more efficient, better funded and more open to borrowers.

The NDB’s headline scale is modest after roughly a decade in operation. It has approved 139 projects with a combined value of about $43 billion. These projects have been distributed mostly among the bank’s core members.

The more revealing figure is actual disbursement. According to the bank’s own count, only about $20 billion of approved loans had been paid out. That gap shows that approval does not automatically translate into money reaching projects. Slow disbursement reduces the bank’s practical impact and limits its ability to recycle funds into new lending.

The comparison with the AIIB makes the gap clearer. The AIIB has 111 approved members and committed about $69 billion across 350 projects. The NDB also faces stagnant asset growth and lacks the AIIB’s AAA credit rating. These constraints help explain India’s push for greater efficiency, capital and membership.

India sees the NDB as BRICS’s most useful way to influence global finance without directly challenging American predominance. A more efficient bank could turn approved projects into completed infrastructure and extend development finance beyond the core BRICS members. More funding would expand its lending capacity, while new members could bring fresh capital and borrowers.

The need is visible in the bank’s performance. The NDB has approved 139 projects worth about $43 billion, but only about $20 billion had been disbursed. India itself received commitments of nearly $10 billion across 32 projects, including metro rail and the Delhi-Ghaziabad-Meerut RRTS corridor. The bank’s slow asset growth remains a bottleneck.

Opening the NDB further would help it approach the reach of other multilateral lenders. However, founders’ voting shares cannot fall below 55%. India must therefore seek expansion while preventing the bank from strengthening Beijing’s overall strategic position.

Local-currency lending gives emerging economies a way to borrow without taking every financing risk through the dollar. That matters because foreign-exchange markets remain volatile amid military and economic wars. It can reduce reliance on the dollar while leaving the dollar as the main currency for much trade invoicing.

The NDB’s 2022-26 strategy commits it to conducting 30% of lending and borrowing in member countries’ local currencies. In practice, that activity is heavily skewed toward China’s renminbi. The bank recently priced a ¥7 billion, roughly $1.04 billion, three-year Panda bond in China’s interbank market. India wants the long-delayed rupee bond to move forward.

If expanded, local-currency operations could make NDB finance more attractive and responsive to borrowers’ needs. They could also broaden the bank’s alternatives to dollar funding. But the article does not provide the rupee bond’s final timing, size or terms, so its effects remain prospective.

The NDB and AIIB were established around the same time, but the AIIB has expanded faster. The AIIB has gathered 111 approved members and committed about $69 billion across 350 projects. The NDB has approved 139 projects worth about $43 billion, mostly among its core members.

The NDB faces several linked disadvantages. Its asset growth has stagnated, restricting lending capacity. Its disbursement is exceptionally slow, with only about $20 billion of approved loans paid out. It also cannot easily attain the AIIB’s AAA credit rating, which helps the AIIB raise money and commit more financing.

Sanctions on Russia have further strained the NDB’s credit standing and dollar funding costs. The bank has extended no new credit to Russia since March 2022 to protect its AA/AA+ rating. Equal voting shares among founders also make capital expansion difficult. Together, these conditions have kept the NDB smaller and slower.

Equal voting shares mean the five founding countries must share control of the NDB. This arrangement also makes capital expansion harder. Any founder that cannot match higher paid-up capital can hold back the whole group, because the bank’s rules preserve equal founder voting shares.

Russia is the clearest constraint. Heavy sanctions have strained its finances, the bank’s credit standing and its dollar funding costs. Although Moscow and Beijing promote de-dollarisation, the NDB has extended no new credit to Russia since March 2022. It took that step to protect its AA/AA+ credit rating.

The result is a lending and fundraising bottleneck. New members can provide capital, but the founders’ collective voting share cannot fall below 55%. That protects founder influence while limiting how much outside membership can change the bank’s resources. Until the capital and voting problem is resolved, the NDB’s expansion remains restricted.

Multilateral development banks are institutions owned or supported by several countries that finance development across borders. Their core work is providing loans and other funding for infrastructure and sustainable development. The source describes the NDB as a tool for mobilising resources in BRICS and other emerging and developing economies.

Their mechanism is straightforward: member countries provide capital, the bank raises additional funds, and projects receive financing. The NDB has committed money to metro rail systems and the Delhi-Ghaziabad-Meerut RRTS corridor. It also lends partly in local currencies, while retaining substantial dollar lending and borrowing.

These banks shape the global financial order by creating additional channels for development finance. The NDB has approved 139 projects worth about $43 billion, while the AIIB has committed about $69 billion across 350 projects. Their reach depends on capital, credit ratings, membership and the speed at which approved loans are disbursed.