New Development Bank: Iran’s Entry and the Future of BRICS Financial Cooperation

Subject: GS 2: International relations

Context: Iran has indicated that it will soon join the New Development Bank, potentially expanding BRICS-led financial cooperation amid efforts to reduce dependence on dollar-based financing.

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About BRICS New Development Bank

• The New Development Bank (NDB), formerly called the BRICS Development Bank, is a multilateral development bank established by BRICS countries to mobilise resources for infrastructure and sustainable development projects in emerging and developing economies.
• It provides loans, equity investments, guarantees and technical assistance, with increasing emphasis on green energy, social infrastructure and local-currency financing.
• Origin: India first proposed the idea of a BRICS-led development bank at the 4th BRICS Summit in New Delhi in 2012.
• Establishment: The founding countries signed the Agreement Establishing the NDB at the 6th BRICS Summit in Fortaleza, Brazil, in 2014.
• • NDB became operational in 2015
• Headquarters: The NDB is headquartered in Shanghai, China, and maintains regional offices in Johannesburg, São Paulo, Moscow and GIFT City, India, to strengthen its regional outreach.
• Membership: The five founding members are Brazil, Russia, India, China and South Africa.
  • The bank is open to UN member states, and its membership has expanded to include Bangladesh, UAE, Egypt, Algeria and Uzbekistan.
  • Uzbekistan became the NDB’s 10th member in June 2026.
• Capital: The NDB has an authorised capital of US$100 billion, with US$50 billion as initial subscribed capital contributed equally by the five founders.
• Voting Rights: The five founding members initially held equal voting shares of 20% each, and no single member has veto power.
  • The founding BRICS countries must collectively retain at least 55% of total voting power after membership expansion.
• Governance: Board of Governors is the highest decision-making body; the Board of Directors oversees operations and projects. 
  • The President is elected from the founding members on a rotational basis for a five-year term.

Potential Impact of Iran’s Entry

• Alternative Financing: Greater access to development finance despite Western sanctions.
• De-dollarisation: Could promote national-currency transactions and reduce dependence on the US dollar.
• Global South Cooperation: Strengthens South-South cooperation and expands NDB’s geopolitical reach.

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