Union Cabinet gives approval for establishing New Development Bank & BRICS Contingent Reserve Arrangement
Union Cabinet on 25 February 2015 gave its approval for establishing the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA).
This decision was taken in Union Cabinet meeting chaired by Prime Minister Narendra Modi.
Benefits of New Development Bank (NDB)
- Mobilise resources for projects related to infrastructure and sustainable development among member nations of BRICS i.e. in Brazil, Russia, India, China and South Africa.
- The bank will help India and signatory member countries to raise and avail resources for their infrastructure and sustainable development projects.
- Act as a binding agent to maintain close relations among BRICS countries and provide a powerful instrument for increasing their economic cooperation.
Benefits of BRICS Contingent Reserve Arrangement (CRA)
- In order to effectively deal with short term liquidity pressures it will provide short-term liquidity support to the members.
- It will also help India and other signatory countries to forestall short-term liquidity pressures.
- CRA will strengthen financial stability among BRICS countries by providing mutual support to each other.