India, one of the founding members of the AIIB, has been elected to the board of directors of the China-sponsored Asian Infrastructure Investment Bank which is expected to begin loan approvals before the end of this year.
The bank, however, said the Vice President the post for which India as the second largest shareholder aspired for will be selected on merit.
"With regard to senior positions like Vice President and Director Generals the basic principle is meritocracy. This can never ever be compromised," former Chinese Finance Minister Jin Liqun who was elected to be the President of the bank told the media here.
"I would try to avoid creating senior positions just for the sake meeting the needs of some other countries because that would lead to redundancies in future," Jin said.
Earlier, Dinesh Sharma, Additional Secretary of Ministry of Finance was elected to the 12-member board for which a secretballot was held yesterday, Indian officials told PTI.
This will be the first board of directors for the new bank in which 57 members joined a founding members.
Noting that people "up the standard" will be selected for the post, Jin said the interests of the smaller shareholders also can not be ignored.
Jin, a former Chinese Finance Minister was elected to head the bank based in Beijing after Russia withdrew its candidate.
"We have a number of major shareholders,China, India, Russia, Korea, Indonesia and some others. We certainly think it is very much important for AIIB to work very closely with major shareholders but we should not overlook the importance of the other smaller shareholders," he said.
The election of India to board of directors of the AIIB expected to provide significant role for it as it is the forum that approves the loans for projects.
About the Vice President post Sharma yesterday said that India has "argued" to get the post based on its shareholding.
He said"personally I was happy to lose that argument,"as New Delhi in the past has objected to such a practice in the World Bank and IMF.
AIIB was formally launched by Chinese President Xi Jinping at a special function here yesterday.
The inaugural meeting of the board of the governors of the bank which concluded today has approved by-laws, rules and codes of conduct for the bank.
Finance Minister Arun Jaitley is the designated governor
of the AIIB from India.
Sharma who headed the Indian delegation represented Jaitley at the meeting.
With authorised capital ofUSD 100 billion and subscribed capital of USD 50 billion,AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.
China is the largest shareholder with 26.6 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 USD 8.37 billion has paid first installment of USD 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 installments.
Jin said the AIIB plans to bring the first loans for approval before the end of this year.
The language of the bank will be in English and the currency will be US dollar, he said.
"Members can contribute in any currency. We make loans in US dollars," he said.
Answering a question about the bank's oversight mechanism, the he described the AIIB's core values as "lean, clean and green," and stressed the importance of putting in place "a good system and corporate culture."
There will be "division of power and responsibility between the board and management," with the board exercising oversight of the management in addition to the designing and approval of major policies, he said.
There will be a unit responsible for "compliance, effectiveness and integrity," which will report directly to the board.
"It is very crucial to not just have something brilliant on the paper. It is important to implement. As president of AIIB, I will abide by all the rules, I will work under the leadership of the board of governors and the leadership of board of directors," Jin added.
"I want to make sure all the policies we designed and approved by the board will be implemented to the letter, and the oversight mechanism will be implemented without any compromise," he said on oversight.
"We have confidence to tell the whole world, we mean what we say, and we will achieve our objective of building the AIIB into a truly great multilateral development institution with 21st-century governance," he added.
The Beijing-based development bank is designed to provide financial support for infrastructure development and regional connectivity in Asia.
