Union Cabinet on 13 October 2016 approved MoU between Export-Import Bank of India (Exim Bank) on General Cooperation with the BRICS promoted New Development Bank (NDB), along with other Development Financial Institutions of BRICS nations. This will be achieved through the BRICS Interbank Cooperation Mechanism.
This approval will help in enhancing trade and economic relations among the BRICS countries and benefit the participating institutions from the BRICS nation. There is no financial implication involved in signing of the MoU.
• The MoU is a non-binding umbrella agreement.
• It aims at establishing a cooperation framework in accordance with the national laws and regulations, besides skills transfer and knowledge sharing amongst the signatories.
Establishment of the NDB reflects the close relations among the BRICS countries and provides a powerful instrument for increasing their economic cooperation and help India play an enhanced international role.
Why the MoU is necessary?
The signing of MoU is necessary in the context of cooperation extended by the Members in various forms for promoting and facilitating trade of goods and services as well as investments in mutual projects among the BRICS countries. It will help in sustainable development and inclusive economic growth of the BRICS nations.
BRICS Interbank Cooperation Mechanism
Five banks from the BRICS nations had established the BRICS Interbank Co-operation Mechanism to enhance trade and economic relations among the BRICS countries. The BRICS Interbank Co-operation Mechanism now proposes to sign a Memorandum of Understanding (MOU) on General Co-operation with the New Development Bank.