Dhaka, Bangladesh (BBN) – The Bangladesh government is planning to join the proposed Asian Infrastructure Investment Bank (AIIB) to steer development agenda of the regional countries under a new horizon of banking partnership, officials said.

 

The AIIB, the brainchild of Beijing, will be a regional development bank with an authorized capital of US$ 100 billion, according to a draft memorandum of understanding (MoU) on launching the new bank.

 

The economic relations division under the finance ministry after a thorough review of the proposed MoU, recommended joining the China-sponsored new regional bank, the New Age, a local newspaper, reported quoting sources.

 

The ERD on Sunday in a summary sent to Finance Minister AMA Muhith backed the formation of the regional bank and strongly recommended Bangladesh should join the new venture to promote the country’s poor infrastructure and spur the stalled regional connectivity.

 

The initial subscribed capital for each of the willing member countries will be US$ 50 million. The membership of the proposed bank is open for countries committing to see regional development goes unhindered, said the memo.

 

The Chinese government early this month sent the draft memo of AIIB to the foreign ministry. The economic relations division under the finance ministry has completed the review of the proposed regional bank, the newspaper said.

 

“We have examined the MoU on AIIB thoroughly before making any concrete decision”, a senior official at the ERD told the newspaper on Monday.

 

He said the proposed bank looks very positive towards developing infrastructure connecting the Asian economies, which would be a major boost for the country’s growth through enhanced coverage of land connectivity.

 

The official of the ERD said they had sent a proposal to the finance minister to join the new initiative led by China.

 

The MoU said the operational policy of the proposed bank will be based on best practices of other multilateral development banks. A Trust Fund will be created under the proposed AIIB to mobilize resources to invest in the infrastructure network of regional countries.

 

The countries to sign MoUs will be the founding members of the bank, which may have regional
offices apart from its headquarters to be set up in a country of consensus among the AIIB members, the MoU said.

The governance structure of the proposed regional bank will be of three tiers — board of governors, board of directors and bank management. The board of directors will be non-resident, while alternate director will be chosen from directors of the bank, the MoU elaborates.

Bangladesh is now member of development banks like ADB and World Bank.

Quoting diplomatic sources, the newspaper also said China had recently offered the membership of AIIB to India, which is yet to decide on joining. They said AIIB could be free from the influence of western-backed lenders such as the World Bank and the Asian Development Bank.

Prime Minister Sheikh Hasina early this month had said in parliament that Bangladesh will consider joining in the Chinese initiative to establish a new bank if it seems beneficial for the development of the country.

BBN/SSR/AD-25July14-4:04 pm (BST)