The Union Cabinet has given its approval for signing of a MoU on General Cooperation with New Development Bank (NDB) or BRICS Bank and Export Import Bank of India (EXIM Bank). The MoU will be through the BRICS Interbank Cooperation Mechanism.
The MoU will help enhance trade and economic relations among the BRICS countries. However there is no financial implication involved with signing of the MoU.
What is Purpose of MoU?
This MoU is a non-binding umbrella agreement. It aims at establishing a cooperation framework in accordance with the national laws and regulations. Besides it also seeks for skills transfer and knowledge sharing amongst the signatories.
Why this MoU was signed?
- The establishment of the NDB reflects the close relations among the BRICS countries and provides a powerful instrument for increasing their economic cooperation among them.
- The signing of MoU is necessary keeping in view the strategic relevance of cooperation for sustainable development and inclusive economic growth among BRICS countries.
- It also reflects cooperation extended by the BRICS members in various forms for promoting and facilitating trade of goods and services as well as investments in mutual projects.
The BRICS Interbank Co-operation Mechanism was established by the five banks from the BRIC nations to enhance trade and economic relations amongst the BRIC countries, and enterprises. It proposes to sign a MOU on General Co-operation with the NDB. BRICS countries (Brazil, Russia, India, China and South Africa) are developing countries, collectively accounting for 43% of the world’s population, 15% of global trade and 20% of the world’s investment flows.