China today said the proposed Asian Infrastructure Investment Bank (AIIB), for which India and 22 other Asian countries have signed up, is expected to start operations by the end of this year.
The founding nations of the bank are expected to complete negotiations on subscription of the bank’s charter and regulations before June this year, China’s Ministry of Finance (MoF) said.
So far, the number of prospective founding members of the AIIB has increased to 23, including Bangladesh, Brunei, Cambodia, China, India, Indonesia, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, Vietnam, and the Maldives.
Asia’s other influential economies Japan, South Korea and Australia did not join the bank amid concerns expressed by the US stating that AIIB lacked transparency.
The MoF said any country interested in the AIIB is welcome to join it.
The bank proposed last October will be headquartered in Beijing. The authorised capital of AIIB will be USD 100 billion and the initial subscribed capital is expected to be around USD 50 billion. The paid-in ratio will be 20 per cent.
Voting rights are to be decided after consultations among the members over fixing the benchmarks which are expected to be a combination of GDP and Purchasing Power Parity (PPP).
Based on this formula, India?will be the second largest shareholder of the bank after China.
The?AIIB, which is regarded as a rival to Japan-backed Asian Development Bank (ADB) and the World Bank, has been mooted by China in addition to the BRICS Development Bank formed in 2014 by Brazil, Russia,?India, China and South Africa which will be based in Shanghai.
The BRICS Bank is set to commence its operations with India as its president.
China says the AIIB will not be a rival to any other banks and would contribute more funding for development of infrastructure in Asia.
Beijing also announced a USD 40 billion fund for the Silk Road and Maritime Silk Road, another mega project launched by Chinese President Xi Jinping to expand China’s influence through infrastructure development in the region.