DAVOS: BRICS countries' New (rpt) New Development Bank expects its lending to double every year over the next 2-3 years and is looking at leveraging its USD 10 billion capital in first 6-7 years, NDB President KV Kamath has said.
The Bank would also see its staff strength increase over 3 fold going forward.
"By the end of this year, we will have a staff strength of 125-130 people. In the next three years, that is from year two to year five, we will take it up to 400 or so," Kamath told PTI in an interview here.
The veteran banker, who was here to attend the World Economic Forum (WEF) Annual Meeting held last week, said the distribution of loan to member countries would primarily be driven by the demand from them.
On whether NDB, which has funded two projects for India so far, would be giving more funds to Indian projects, Kamath said, "Let me put it in the context. There are five members and all members are borrowing members and therefore each one of them would have aspiration to borrow.
"So, the way we try to meet the expectations of all the members is to increase the pie. So, we did get off to a start in the first year and in the second year we would try to double our lending. I would think that in the next 2-3 years we would virtually double our lending every year."
Kamath said it would help "meet a small part of the aspirations of our members".
"It would keep doubling in the near term because we started with a small base," he explained.
Asked whether the total capital would have to be increased beyond $10 billion, he said, "We are currently planning for leveraging this $10 billion over the first 6-7 years. At that point in time what I expect to happen is that there would be more efficient ways to use capital."
A multilateral development bank established by Brazil, Russia, India, China and South Africa (BRICS), NDB began operations last year. The purpose of the Bank is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries. It has an initial authorised capital of $100 billion and initial subscribed capital of $50 billion of which $10 billion will be paid-in capital.
The initial subscribed capital is equally distributed amongst the founding members.
In 2016, the board of directors of the NDB approved seven investment projects in all member countries for a total of over $1.5 billion, including two projects in India totalling loans worth $600 million.
Kamath, who was instrumental in creating India's biggest banking sector success story with ICICI Bank where he last served as Chairman before moving to his current role, said the NDB would go for new products by the third year or so.
"Loans consume capital in a very heavy way. There are a lot many other ways with which you can contribute to growth but not use your capital. By the third year or so, we should be able to do the other types of work that we need to do. That will probably make the capital go further."
He said that would require NDB to further increase its staff strength.
"One of the fundamentals things that we are trying to do is to be lean. We will continue to be lean, but at the same time, we will continue to drive our growth."
Asked about the BRICS countries considering a rating agency, he said, "That is something happening at the BRICS countries level and NDB is not involved in it. We will see how it evolves."