India has named private banker K. V. Kamath as the first head of the new development bank the BRICS group of emerging market economies is setting up.
“Mr. Kamath has been appointed as the head of the BRICS bank. The appointment will become effective when he becomes free from his current assignments,” Union Finance Secretary Rajiv Mehrishi told reporters on Monday.
India has conveyed the decision to nominate Mr. Kamath for the BRICS bank presidency to other BRICS nations — Brazil, Russia, China and South Africa. Mr. Kamath’s five-year term is to be followed by a Brazilian and then a Russian.
The BRICS had agreed to set up the $100 billion development bank last year, a step that was at the time seen as one that could challenge the dominance of the West in the international financial system. The focus of the international financial system, however, has since then shifted to China’s initiative, the Asian Infrastructure Investment Bank (AIIB).
The BRICS nations had also agreed last year that the New Development Bank, which will fund infrastructure projects in developing nations, would have its headquarters in Shanghai.
Mr. Kamath, a veteran banker, with an eight-year stint at the Asian Development Bank, spent 13 years as ICICI Bank’s head during which it went on to become India’s second largest bank. He retired as ICICI Bank’s CEO and Managing Director in 2009. At present, he is Non-Executive Chairman for ICICI Bank and also software services company Infosys. Mr. Kamath is credited to have nurtured Indian banking sector’s top female bankers, including ICICI Bank’s current head Chanda Kochhar.
A mechanical engineer, he holds a degree from the Indian Institute of Management, Ahmedabad, and was honoured with the Padma Bhushan title in 2008. The BRICS bank will start with an initial paid-in-capital of $50 billion. Each BRICS country will contribute $10 billion. The bank will fund infrastructure projects in developing nations, and will have a $100-billion currency reserve arrangement (CRA) for helping out countries facing short-term liquidity pressures.