India, China to discuss structure of BRICS Bank

Krishna to hold talks with Chinese counterpart Yang Jiechi today

India and China are likely to hold discussions over the structure of the proposed BRICS Bank, when External Affairs Minister S M Krishna and his Chinese counterpart Yang Jiechi will hold talks here on Thursday.

Yang and Krishna will hold parleys to do the groundwork for Chinese President Hu Jintao’s visit to attend the BRICS summit, which is scheduled to take place in New Delhi on March 28 and 29 next.

New Delhi has proposed to set up a BRICS Bank, which will be funded by the bloc’s five members – Brazil, Russia, India, China and South Africa – and finance projects in developing countries. The proposal is likely to be on the agenda of the coming BRICS summit.

India’s proposal for a multilateral bank to be set up by the BRICS appears to be in line with its stand that the developing nations should have greater say in the affairs of the international financial institutions, like World Bank and International Monetary Fund, and thus greater clout over global financial architecture.

New Delhi had earlier circulated a concept note on the BRICS Bank with other members of the bloc. The proposal was discussed in a BRICS Finance Ministers’ meet on the sideline of a G-20 conclave in Mexico City last week.

Though Brazil, Russia and South Africa have generally agreed to India’s proposal on the BRICS Bank and are open to detailed discussions on it during the summit, Beijing is understood to have some differences with New Delhi on the structure of the proposed financial institution.

Sources said that the proposal for the BRICS Bank was still at exploratory stage and New Delhi would continue to discuss about its structure with other members in the bloc.
China is understood to have asked India for clarification on the way the chief of the BRICS Bank would be appointed. India, however, is understood to be not averse to leaving any scope for any particular country to get greater clout than others over the proposed institution.

Sources said that New Delhi might instead prefer for a rotational system to ensure that the representative of each country serves as chief of the bank for a certain period of time.
Interestingly, India’s proposal for BRICS Bank came at a time when the five-nation bloc raised the pitch to end US dominance over the World Bank and stated that the president of the multilateral body should be appointed on merit and not on the nationality of the candidates.