China-backed Asian Infrastructure Investment Bank (AIIB), in which India is the second-largest shareholder, was inaugurated here on Saturday by Chinese President Xi Jinping who said it would boost infrastructure development in Asia and contribute to a fairer global economic governance.
“This is a historical moment,” Mr Xi said addressing the opening ceremony of the bank, which along with the BRICS’ New Development Bank (NDB) is expected to expand infrastructure financing, rivalling the World Bank and the Asian Development Bank.
The AIIB, which has 57 founding members, will be based in Beijing.
The US and Japan, which play dominant roles in World Bank, IMF and the Asian Development Bank (ADB), have stayed out expressing reservations about the institution’s openness.
An Indian delegation headed by Dinesh Sharma, additional secretary finance, took part in the opening ceremony addressed separately by Mr Xi and Premier Li Keqiang.
With authorised capital of $100 billion and subscribed capital of $50 billion, the AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.
China is the largest shareholder with 26.06 per cent voting shares. India is the second-largest shareholder with 7.5 per cent followed by Russia (5.93 per cent) and Germany with 4.5 per cent.
India, whose total capital subscription amounts to $8.37 billion, has paid first instalment of $334.70 million to the paid-in capital stock of the bank. Twenty per cent of the subscription is to be paid in five equal instalments.
By virtue of its 7.5 per cent, India hopes to get elected to the 12-member board of directors.