The Brics Bank will happen thanks, in large part, to the determination of the leaders of both India and China to make it happen. PM Modi let the Chinese proposal of locating the bank in China go through so that the idea could move forward. Xi Jianping settled for equal sharing of equity and voting rights.
Western commentators ask what binds the Brics together. Well, what binds together Israel and the Arabs in the UN or, for that matter, the US and Russia? The point is that international institutions subserve common interests. Initial lending by the bank will be small- say, $40 bn -$60 bn. But that's the financing that developing countries get for infrastructure from the World Bank. So even this small amount positions the bank as a direct competitor to the World Bank. Ditto with the $100 bn contingency fund for BoP crises. At least developing countries will not be entirely the mercy of the IMF-World Bank hereafter.
More in my EPW article, BRICS Bank future hinges on governance.
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