The New Development Bank expands BRICS financial power but remains tied to global capital markets, exposing the bloc's financial paradox.
The future of global financial governance was placed under an intense microscope last week as leaders gathered in New Delhi on September 12 and 13, 2026, for the 18th BRICS summit under the banner of “Building for Resilience, Innovation, Cooperation and Sustainability”. The occasion was draped in a familiar, ambitious promise: that the bloc is actively building an alternative to the western-dominated global financial order. Just days prior to the summit, the finance chiefs of the BRICS nations issued a joint statement demanding comprehensive reform of the International Monetary Fund and the World Bank, arguing that the growing share of emerging markets in global output necessitates making international financial institutions more representative, transparent, and accountable. Now, with the diplomatic communiques finalized and the summit concluded, a more complex analytical question emerges regarding whether the bloc’s premier financial institution, the New Development Bank (NDB), and its associated mechanisms have actually materialized a parallel architecture. A comprehensive review of the chronology of the NDB reveals a significant paradox. While the BRICS nations have successfully established a credible, functioning multilateral development bank, the institution remains deeply enmeshed in, and structurally tethered to, the very global financial system its members frequently seek to challenge.
To understand the current trajectory of the NDB in the wake of the New Delhi summit, the genesis of the BRICS financial architecture must be traced back to its foundational moment in 2015. It was then that the five founding members—Brazil, Russia, India, China, and South Africa—established the NDB through the 2014 Fortaleza Agreement, with the institution becoming operational in 2015, alongside a $100 billion Contingent Reserve Arrangement (CRA) designed to provide a safety net for members facing short-term balance-of-payments pressures, with China accounting for 41 percent of its initial resources. The rationale for a new institution was rooted in a pragmatic assessment of global capital deficits. As noted by the Asian Development Bank (ADB) during the bank’s conceptualization, the annual infrastructure financing needs in the Asia-Pacific region alone exceeded $700 billion, yet existing multilateral development banks (MDBs) were able to finance less than 5 percent of that demand. The BRICS nations also grew frustrated with the slow, cumbersome conditionality of legacy MDBs and their lack of adequate voting power in a system still dominated by Western economies. Consequently, the NDB was designed to be a more responsive alternative. Crucially, the five founders subscribed an equal $10 billion each to the initial capital, securing an 18.72 percent equity and voting share apiece—an institutional design deliberately chosen to contrast with the weighted voting structures of Bretton Woods institutions.
Over the past decade, the NDB has grown its operational footprint and membership, reflecting the broader, albeit sometimes haphazard, political expansion of the BRICS grouping itself. However, there has been no automatic overlap between countries joining the political bloc and those joining its financial institution. The bank’s expansion has been deliberate and structurally constrained. Between 2021 and 2026, the NDB admitted Bangladesh (which is not a BRICS member), the United Arab Emirates, Egypt, and Algeria. In June 2026, Uzbekistan became the bank’s tenth member and its first from Central Asia, while Uruguay was admitted as a prospective member pending the deposit of its instruments of accession. This expansion, however, has not altered the structural dominance of the founding five. To maintain strategic control, the founders established strict governance rules ensuring that their combined voting power remains at a minimum of 55 percent, and no single non-founding member can hold more than 7 percent of total voting power. This mechanism ensures that while the NDB is expanding its geographic outreach to a broader Global South constituency, the original members retain definitive institutional authority, keeping individual new-member voting and capital shares relatively small, with no new member holding more than 2.25 percent of the bank’s shares.
Despite these structural constraints, the NDB has built a substantial, measurable portfolio of projects that formed a key backdrop to the recent summit discussions. By the first quarter of 2026, the bank had approved approximately $42.9 billion in financing for 140 projects across sectors including clean energy, transport, water and sanitation, and digital infrastructure. While significant for a relatively young institution, this remains modest in volume, amounting to about one-sixth of the commitments made by the World Bank Group and leading MDBs in 2025, highlighting the NDB’s current scale relative to legacy institutions. The on-the-ground impact of this financing, however, is highly visible in member states. In Brazil, the Pará State Water and Sanitation Infrastructure Development Project focuses on protecting drinking water and restoring ecosystems. In India, the bank is financing the Delhi-Ghaziabad-Meerut Regional Rapid Transit System to promote low-carbon mobility, alongside loans to state-owned entities like REC Limited to build renewable energy power plants. According to the bank, its cumulative portfolio has helped increase clean energy capacity by 2,400 megawatts, cut annual carbon dioxide emissions by 14.7 million tonnes, and supported the construction of 35,000 housing units, 43 schools, 1,400 kilometers of tunnels and canals, and over 40,000 kilometers of roads. To achieve this scale, the bank has recognized that the infrastructure needs of the Global South are far beyond what it can finance alone, prompting discussions, particularly with India, on how private capital can be mobilised more effectively for development projects.
To sustain this operational impact requires sophisticated asset and liability management and reliable access to international capital markets. As of April 2025, the outstanding market borrowings of the NDB stood at $21.51 billion across international and national exchanges. This capacity was vividly demonstrated on September 10, 2026, just prior to the diplomatic convergence in New Delhi, when the NDB listed a USD 1.75 billion, 3-year benchmark bond on Nasdaq Dubai. The bond, which carries a 4.375 percent coupon and matures in 2029, had been priced in July as part of the bank’s broader $50 billion Euro Medium Term Note (EMTN) Programme. The bond attracted an order book in excess of USD 3.2 billion, with 65 percent of demand from Asia Pacific, 32 percent from EMEA, and 3 percent from the Americas. Daopeng Fu, the NDB’s Vice-President and Chief Financial Officer, noted that the issuance demonstrated strong market confidence in the bank’s robust credit standing. This confidence is underpinned by strong international credit ratings: the bank currently carries an AA+ from S&P, an AA from Fitch, and an AAA from Japan Credit Rating Agency. This reliance on internationally recognized credit-rating agencies and international debt markets underscores a central irony of the BRICS financial project: the institution designed to challenge the western-dominated financial order relies fundamentally on the infrastructure of that same order to mobilize capital efficiently.
Parallel to its market operations, the NDB has aggressively pursued a strategic pivot toward local-currency financing, a move central to the broader BRICS objective of reducing reliance on the US dollar and mitigating exchange-rate volatility. At the bank’s eleventh annual meeting in Moscow in May 2026, Russian Finance Minister Anton Siluanov, who chairs the NDB’s Board of Governors, announced that the share of projects financed in local currencies—which currently stands at 30 percent—will exceed 45 percent by 2031. NDB President Dilma Rousseff emphasized that local currency financing remains a strategic priority for an institution striving to be "larger, greener, more digital, more innovative, more agile and more cooperative." This involves diversifying debt issuance: the bank has previously raised funds in the South African rand and successfully issued a 7 billion renminbi Panda-bond in August 2025 to access China’s domestic capital market. The ambitions for the bank’s future trajectory were laid out at the Moscow meeting, where Professor Jeffrey Sachs, in his address to NDB governors, pegged the relevance of the institution to the broader success of emerging markets, suggesting expansions toward African partnerships, financing green and digital technology stacks, and supporting sustainable urbanisation. However, the historical currency composition of the approved portfolio illustrates the scale of the challenge. As of December 2022, approximately $20 billion of the portfolio was denominated in US dollars, compared with just over $5 billion in renminbi and approximately $3 billion in euros. The subsequent expansion of local-currency financing indicates a gradual, rather than abrupt, diversification away from dollar-based lending. While analysts like Wang Youming of the China Institute of International Studies argue that stronger use of local currencies shields economies from politically motivated sanctions and strengthens financial autonomy, the transition away from the dollar remains gradual and heavily reliant on specific bilateral trade dynamics.
To facilitate this local-currency trade and reduce transaction costs, BRICS finance chiefs have intensified their focus on payment infrastructure. In their September 11 joint statement, the finance ministers and central bank governors encouraged the BRICS Payment Task Force to build on ongoing work to facilitate practical solutions for cross-border payments that are "fast, low-cost, more accessible, efficient, transparent, and safe." Discussions have moved beyond theoretical frameworks toward practical efforts to improve cross-border payment interoperability, facilitate local-currency settlements and explore initiatives associated with "BRICS Pay," a proposed decentralized digital payment system. However, BRICS Pay should not yet be characterized as a fully operational BRICS-wide payment system; the broader governmental effort remains focused on interoperability among national payment systems and practical cross-border settlement mechanisms. India, leveraging its advanced digital public infrastructure, is actively pushing for progress on linking digital currencies across member nations. However, the precise role of the NDB in these payment initiatives remains uncertain, and the technical hurdles of achieving seamless interoperability between highly diverse national financial systems are substantial. Furthermore, while Iranian President Masoud Pezeshkian asserted during the BRICS Business Forum that the NDB was explicitly created to "free countries from reliance on the dollar and to stand against America’s push for dominance," India has carefully delineated its own position. New Delhi has clarified that BRICS is not discussing the creation of a common currency, nor is it seeking to replace the US dollar with another existing currency, such as the Chinese yuan or the Indian rupee. India’s position reflects a strategic preference for managing currency risks and facilitating reciprocal settlements without replacing dependence on one major currency or financial system with dependence on another.
This divergence in strategic priorities highlights the deeper structural and economic contradictions within the BRICS framework that constrain the NDB’s broader ambitions. The grouping’s economic weight is undeniable, yet its internal trade dynamics are highly asymmetrical. During the CNN-News18 BRICS Dialogues held alongside the summit, former G20 Sherpa Amitabh Kant delivered a sharp critique regarding the prerequisites for the NDB’s success. Kant argued that for the BRICS Bank to play a "critical and significant role," the Chinese economy must open up. He pointed to China’s dominant position in manufacturing, technology, critical mineral processing, and electric vehicles, contrasting it with Beijing’s heavily export-oriented trade model. Kant specifically cited the non-tariff barriers that prevent Indian pharmaceutical and drug manufacturers from exporting to China, asserting that "China is only an exporting country. It doesn’t allow imports, even from BRICS countries." This assessment underscores a fundamental reality: a development bank can only be as effective as the underlying economic integration of its members. If intra-BRICS trade remains heavily skewed toward Chinese exports, and if member states cannot access each other’s consumer markets, the utility of local-currency financing and regional financial mechanisms is inherently limited.
Beyond internal trade imbalances, the NDB faces a fundamental issue of scale relative to the monumental needs of the Global South, alongside evolving governance concerns. The 2025 BRICS Leaders’ Declaration recognized this gap, agreeing to incubate the BRICS Multilateral Guarantees initiative within the NDB as a pilot and encouraging continued dialogue between the bank and the BRICS Interbank Cooperation Mechanism to better mobilize private capital. The bank is also expanding beyond physical infrastructure, with NDB Vice President Roman Sherov indicating that the institution will incorporate digitalization and AI-powered digital finance into its investments over the next five years. Yet, scholars monitoring the institution point out that the NDB still has a limited base of lending and borrowing, and there are persistent questions regarding transparency and environmental and social safeguards. The bank’s Environmental and Social Framework places substantial implementation responsibilities on project clients while requiring the NDB itself to undertake screening, assessment, monitoring, disclosure and oversight, including requirements relating to grievance redressal. Although gender equality is explicitly recognized as a core principle of the NDB’s Environmental and Social Framework, observers have raised questions about the level of detail, implementation mechanisms and measurable gender-specific indicators within the framework. As the bank expands its operations into complex digital and AI-powered infrastructure, the adequacy of its governance and stakeholder engagement mechanisms will face increasing scrutiny.
These operational and structural realities lead to a profound analytical paradox, one that critics argue defines the current state of the BRICS financial architecture. As noted in recent analyses, including commentary in The Hindu ahead of the New Delhi summit, the BRICS countries have not built a genuinely alternative financial architecture. The short answer to whether they have materialized a fully parallel financial system is no—but the reasons have less to do with political ambition than with institutional structure. The NDB is the most tangible institutional component of the emerging BRICS financial architecture, but it is not itself a self-contained alternative to the existing global financial system. The BRICS nations remain deeply integrated into the global financial system even as they seek to reform and diversify it. The NDB’s ability to function relies heavily on its integration into the global financial system. Its ability to access international capital markets through instruments such as the $1.75 billion benchmark bond, its reliance on international credit rating agencies to maintain its AA+ and AA ratings, and the fact that the bulk of its loan portfolio remains denominated in US dollars, all demonstrate that the bank operates within the parameters of the existing global order. The ADB noted early in the BRICS Bank’s conceptualization that the new institution should be viewed as a complementary force that could free up traditional MDB resources for lower-income countries, rather than an outright rival. Yet, the aggressive geopolitical rhetoric surrounding the NDB often obscures this complementary reality, creating a gap between the institution’s operational pragmatism and its political branding.
As the dust settles on the 18th BRICS summit in New Delhi, the sequence of events over the past decade reveals a complex evolution of the Global South’s financial ambitions. The establishment of the NDB in 2015 was a watershed moment, providing a tangible institutional manifestation of emerging market power. The subsequent expansion of its membership, the listing of bonds on international exchanges like Nasdaq Dubai, and the strategic pivot toward local-currency financing and digital payment interoperability demonstrate a sustained, measurable effort to build financial resilience. The bank has successfully mobilized tens of billions of dollars, supported critical green and physical infrastructure, and maintained robust credit ratings in volatile markets. Yet, the chronology also reveals the limits of institutional design in the face of structural economic realities. The NDB’s scale remains modest compared to legacy institutions, its local-currency transition is gradual, and its efficacy is constrained by the internal trade asymmetries and lack of market access that characterize the broader BRICS economic relationship.
The principal unresolved question facing the bloc is not whether the NDB can survive, but whether BRICS can channel its immense strategic and political ambition into the durable, integrated economic architecture required to support it. For the NDB to transition from a supplementary financier to a genuinely transformative pillar of the Global South, the member states must address the underlying structural bottlenecks: opening domestic markets to balance intra-bloc trade, deepening financial integration beyond rhetorical de-dollarization, and strengthening the transparency and safeguard frameworks that govern its projects. Until the economic integration of BRICS members better aligns with their geopolitical ambitions, the NDB is likely to remain a highly effective but fundamentally constrained institution: one capable of diversifying the financing options available to the Global South, but not yet capable of replacing the global financial architecture in which it operates.
Apple News, Google News, Feedly, Flipboard, and WhatsApp Channel
