World Bank today welcomed the formation of the China backed Asia Infrastructure Investment Bank, saying it will help mobilise more investments to develop infrastructure in the region and help improve the functioning of other international multilateral financial bodies.
"The need for infrastructure is immense. Therefore the initiative of mobilising more infrastructure investments is extremely welcome," Chorching GOH, Lead Economist of the World Bank told media here today.
India is among the 21 countries who have signed up for the
Asia Infrastructure Investment Bank (AIIB), floated by China to focus on financing infrastructure in Asian countries.
AIIB is seen as a potential rival to the existing Western- and Japanese-dominated institutions such as the World Bank and the ADB, which is based in Manila.
Australia, Japan, Indonesia and South Korea skipped the signing ceremony of MOU for the founding members of AIIB held here on October 24.
The bank to be headquartered in Beijing is expected to be operational by next year.
The MOU specifies that 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 bench marks which were expected to be combination of GDP and Purchasing Power Parity, (PPP).
Based on this formula India will be the second largest share holder of the bank after China.
GOH said, "The establishment of AIIB ... Also gives Asian Development Bank and multinational banks like World Bank additional room to improve our productivity and efficiency and delivering client services to the client countries."
"Considering that it is backed by China it could be efficient and effective institution. It is a good thing for all," she added.
