"I don't think it was primarily meant to challenge the existing multilateral institutions but it certainly is saying look we have plenty of money ourselves, why don't we put some of this money to use in a way that benefits us rather than necessarily depending on the multilateral institutions to change which is taking much more time than anybody thought of," he said.
The BRICS bank is meant to provide patient money, risk capital to long term projects, he said in a speech at an event organised in Chicago on Friday by the Chicago Council on Global Affairs.
"One of the biggest lacunae in emerging markets is patient, risk-bearing money, so if we can have a bank which is willing to take junior stakes or equity stakes...that would be a really good thing," he said.
The announcement about the bank and a $100 billion Currency Reserve Arrangement (CRA) that will help countries to deal with short-term liquidity pressures, was made on July 15 at the conclusion of the 6th BRICS Summit in Brazil.
India will hold the presidency of the bank for the first six years.
The New Development Bank to be based in Shanghai, China's financial hub, will become operational in about two years.
India's presidency will be followed by Brazil and Russia who will have five years term each under an agreement reached after intense negotiations among the five country-grouping BRICS -Brazil, Russia, India, China and South Africa.