Twenty-One Asian countries including India, China, and Pakistan have signed an inter-governmental memorandum of understanding on the Asia Infrastructure Investment Bank for regional development.
The memorandum will open ways for the formal establishment of the bank, proposed by China, which will be tasked with funding regional infrastructure projects.
In October last year, President Xi Jinping put forward a proposal on setting up the bank. Since then, five rounds of talks with countries interested in the proposal have been held on establishing the multilateral lender and achieving its reported capital target of 100 billion dollars.
Xi met with delegates from the 21 initial participants, including India, after Friday's signing ceremony.
The signatories decided the bank's headquarters will be in Beijing and they expect it to become operational before the end of 2015, the report said.