UPSC Prelims 2016 Q67: Indian Economy – International Institutions & Reports
Consider the following statements:
1. New Development Bank has been set up by APEC.
2. The headquarters of New Development Bank is in Shanghai.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer: (b) 2 only
Explanation
New Development Bank (NDB)
| Statement | Verdict | Fact |
|---|---|---|
| 1. New Development Bank has been set up by APEC | Incorrect | It was set up by BRICS: Brazil, Russia, India, China, South Africa |
| 2. The headquarters of New Development Bank is in Shanghai | Correct | Shanghai, China |
Key facts:
| Feature | Detail |
|---|---|
| Agreed at | Sixth BRICS Summit, Fortaleza (Brazil), 2014 |
| First President | K.V. Kamath of India |
| Capital | Authorised 100 billion dollars; initial subscribed 50 billion, shared equally |
| Voting | Equal for the five founders; no veto |
| Sister arrangement | Contingent Reserve Arrangement of 100 billion dollars |
Answer: (b) 2 only.
Why each option is right or wrong
- (a) Incorrect. The bank was set up by BRICS, not by APEC.
- (b) CORRECT. The headquarters of the New Development Bank is in Shanghai.
- (c) Incorrect. Statement 1 is false; APEC has no role in the bank.
- (d) Incorrect. Statement 2 is true; the bank sits in Shanghai.
Key point
New Development Bank: BRICS bank agreed at Fortaleza (2014); headquarters Shanghai; first President K.V. Kamath; equal shares and votes.
Remember
New Development Bank = BRICS bank in Shanghai.
Common mistakes
- Confusing the New Development Bank (Shanghai) with the AIIB (Beijing).
- Thinking China holds the largest share; the five founders hold equal shares.
- Linking it to APEC, of which India is not even a member.
Exam tip
NDB = BRICS = Shanghai. AIIB = China-led = Beijing.
Sources
- New Development Bank — Agreement on the New Development Bank (Fortaleza, 15 July 2014)
- Ministry of External Affairs — Sixth BRICS Summit: Fortaleza Declaration