Leaders of the BRICS nations, from left, Russia's President Vladimir Putin, India's PM Narendra Modi, Brazil's President Dilma Rousseff, China's President Xi Jinping and South Africa's President Jacob Zuma, pose for a group photo during the BRICS Summit.
Leaders of the BRICS emerging market nations launched a $100 billion development bank and a currency reserve pool on Tuesday in their first concrete step toward reshaping the Western-dominated international financial system.
The bank, aimed at funding infrastructure projects in developing nations, will be based in Shanghai, China, and India will preside over its operations for the first six years, followed by five-year terms for Brazil and then Russia, leaders of the five-country group announced at the 6th BRICS - Brazil, Russia, India, China and South Africa - summit. (BRICS Victory for India: Your 10-Point Cheatsheet
The member countries will also set up a $100 billion currency reserves pool to help countries forestall short-term liquidity pressures.
For India, it was a moment of success after hard bargaining to settle where the bank would be located and the share-holding in it. The bank will be called the New Development Bank, a name suggested by Prime Minster Narendra Modi. (The Biggest Challenge for BRICS Success? Big Brother China)
Also, the bank will begin with a subscribed capital of $50 billion divided equally between its five founders; China, the world's number 2 economy, had argued that the economic strength of a member nation should be the criteria for contribution to the bank - a higher contribution would automatically mean greater control. But in intense negotiations that delayed the bank for two years, India and Brazil fought China's attempts to get a bigger share in the lender than the others. (Read: Foreign Media on BRICS New Development Bank
"The agreement towards setting up the BRICS New Development Bank is a significant step. I am happy the initiative announced in 2012 in Delhi has become a reality," PM Modi said. The summit is Mr Modi's first multilateral engagement since he took over as Prime Minister in May this year. (BRICS: PM Pitches for 'Zero Tolerance' Towards Terror)
The long-awaited bank is the first major achievement of the BRICS countries since they got together in 2009 to press for a bigger say in the global financial order created by Western powers after World War Two and centered on the International Monetary Fund and the World Bank.
The BRICS were prompted to seek coordinated action following an exodus of capital from emerging markets last year, triggered by the scaling back of US monetary stimulus. The new bank reflects the growing influence of the BRICS, which account for almost half the world's population and about one-fifth of global economic output.