Expanding Membership in the New Development Bank; Requirements, Process and Strategic Approaches

Membership expansion is considered one of the strategic priorities of the New Development Bank (NDB). Increasing the number of members not only strengthens the Bank’s global standing, but also enables broader financing for infrastructure and sustainable development projects in BRICS member states, emerging economies, and developing countries. Furthermore, the admission of new members enhances the Bank’s capital base, diversifies its project portfolio, and incorporates the development experience of newly admitted countries.

General Requirements for Membership in the New Development Bank

According to the provisions of the Agreement, countries may join the Bank either as “borrowing members” or “non-borrowing members.” International financial institutions may also attend meetings as observers, subject to the decision of the Board of Governors. The main membership requirements include:

Membership Criteria

• Membership of the applicant country in the United Nations
• Subscription to the Bank’s capital shares in accordance with the framework determined by the Board of Governors
• Acceptance of the paid-in capital schedule
• Acceptance of the representation arrangement in the Board of Directors
• Commitment to the provisions of the Bank’s Agreement and strategic principles
• Acceptance of the Bank’s policies and procedures
• Completion of necessary domestic procedures to finalize membership

Accession Process for New Member Countries

Applicant countries must complete a series of preliminary and formal stages prior to accession. These steps are designed to assess the country’s ability to fulfill its obligations and align with the Bank’s principles.

Membership Stages

1. Conducting preliminary discussions with an existing member country or a country eligible for membership.
2. Exchanging information regarding the Bank’s operations, policies, priorities, and the applicant country’s economic situation.
3. Determining the number of shares to be subscribed by the prospective member.
4. Agreeing on the schedule and phases for capital payment.
5. Establishing a timeline for completing the applicant country’s internal procedures.
6. Obtaining authorization for formal negotiations and subsequently initiating official accession negotiations.

Strategic Approaches of the NDB in Admitting New Members

Although the NDB seeks to expand its membership, the process is managed cautiously and without haste. Key strategic approaches include:

Key Strategies

• Gradual and Balanced Admission: Ensuring geographic diversity and a balanced mix of countries with varying sizes and levels of development.
• Preserving or Enhancing the Bank’s Credit Rating: Admitting non-borrowing members with high credit ratings (AA or AAA) to offset the lower ratings of some borrowing members.
• Alignment with ESG Standards: Assessing the applicant country’s climate, environmental, social, and governance policies.

Withdrawal Conditions

According to Chapter 7 of the Agreement, members may submit a request to withdraw from the Bank. After submission, the Bank reviews the request within a minimum period of six months and, if approved, proceeds with capital redemption. Thereafter, the withdrawing country ceases to participate in the Bank’s profit and loss distribution.