Five banks of BRICS Interbank Cooperation Mechanism (ICM) have agreed to establish local currency credit lines and develop cooperation on credit ratings. In this regard, they have signed agreement ahead of 9th BRICS summit to be held in Xiamen, China.
These five banks are Brazilian Development Bank, Russia’s Vnesheconombank, Export-Import Bank of India (EXIM), China Development Bank and Development Bank of South Africa.
The agreement will allow these five banks to establish framework mechanism to extend credit lines in local currencies to BRICS ICM members and BRICS companies against guarantees of signatory banks. The use of local currencies will help to promote mutually beneficial economic cooperation, increase trade, mitigate currency risks and facilitate companies in accessing BRICS markets.
Moreover, the agreement on credit ratings will allow ICM members to share information about internal credit ratings assigned to clients, as well as assignment methodologies and rating assessment. Information under it will be provided at request and on a confidential basis.
BRICS Interbank Cooperation Mechanism (ICM)
BRICS (Brazil, Russia, India, China and South Africa) nations had established the BRICS ICM to enhance trade and economic relations amongst BRICS countries, and enterprises.