30 JUNE 2015: India joins AIIB with 7.5% voting power

Ø  India and 49 other founding members of the Asian Infrastructure Investment Bank (AIIB) on Monday signed articles that determine each country’s share and the lender’s initial capital. The remaining seven founding members can sign the agreement before December 2015. The signing ceremony took place in Beijing at the Great Hall of the People. The AIIB is expected to focus on infrastructure development in Asia, and unlike the existing International Monetary Fund and World Bank, is unlikely to restrict lending on political considerations. Following the ceremony, China’s President Xi Jinping welcomed the heads of delegations from the Bank’s 57 prospective founding members. A special ministerial meeting was also held in the afternoon chaired by Chinese Finance Minister Lou Jiwei. The AIIB is an example of constructive cooperation among emerging economies to increase the space available for infrastructure financing… It is a regional initiative and, therefore, fully complements global initiatives such as the New Development Bank (set up by the BRICS nations), former economic diplomat and Director of the National Institute of Public Finance and Policy in New Delhi, Rathin Roy, told?The Hindu. According to an AIIB press statement, the Bank will be headquartered in Beijing, and will have an initial authorised capital stock of $100 billion. Reflecting regional character of the Bank, its regional members will be the majority shareholders, holding around 75 percent of shares. “The Bank’s foundation will be built on international best practices and the lessons and experiences of existing multilateral development banks and the private sector,” the statement said. The AIIB is expected to become operational by the end of the year. Ashok K Kantha, India’s Ambassador in China, led the Indian delegation at the ceremony and signed the Articles of Agreement. India had signed the Memorandum of Understanding for Establishment of AIIB in October 2014 along with 21 regional founding members.

Ø  The Centre will in a phased manner soon open up India’s non-litigious services and international arbitration legal services to foreign law firms. The proposal for the reform will be put up for approval in early July to a Committee of Secretaries after which it will be taken up by the Cabinet chaired by Prime Minister Narendra Modi. The government was keen to announce the liberalised policy in January during the visit of U.S. President Barack Obama. However, the move was postponed after resistance from the domestic legal services industry.

Ø  With Japan, the other large Asian economy besides China, opting out of the Asian Infrastructure Investment Bank’s membership, India is the bank’s second largest shareholder with a stake of 8.52 per cent and a voting share of 7.5 per cent. The voting shares are based on the size of each member country’s economy and not contribution to the bank’s authorised capital. China’s shareholding is 30.34 per cent and it has retained 26.06 per cent of the voting rights with veto powers for certain key decisions. Apart from China and India, some of the countries which signed the agreement are Australia, Austria, Azerbaijan, Bangladesh, Brazil, Brunei Darussalam, Cambodia, Egypt, Finland, France, Georgia, Germany, Iceland, Indonesia, Iran, Israel and , Italy, Jordan, Kazakhstan, Kyrgyz Republic, Lao PDR, Luxembourg, Maldives, Malta, Mongolia, Myanmar, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, Portugal, Qatar, Republic of Korea, Russia, Saudi Arabia, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Turkey, the U.A.E and the U.K.