Asian Infrastructure Investment Bank (AIIB)

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Asian Infrastructure Investment Bank (AIIB)- Relevance for UPSC Exam

GS Paper 2: International Relations- Important International institutions, agencies and fora- their structure, mandate.

Recently, Former Reserve Bank of India (RBI) governor Urjit Patel has been appointed vice-president of the Beijing-based Asian Infrastructure Investment Bank (AIIB).
Patel will serve a three-year term as one of the multilateral development bank’s five vice-presidents, and will take the place of former Gujarat Chief Secretary D.J. Pandian.
- He will be leading the AIIB’s investment operations and all sovereign and non-sovereign lending in South and Southeast Asia.

About: Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
- AIIB Headquarter: Asian Infrastructure Investment Bank (AIIB) headquartered in Beijing and began its operations in January 2016.
AIIB Articles of Agreement: Asian Infrastructure Investment Bank (AIIB) was established through this agreement.
- Asian Infrastructure Investment Bank (AIIB) came into force on 25 December 2015).
- Asian Infrastructure Investment Bank (AIIB) commenced its operations in 2016.
AIIB Membership: The Parties (57 founding members) to agreement comprise the Membership of the Bank.
- Asian Infrastructure Investment Bank (AIIB) membership has now grown to 104. The U.S. and Japan are not among their members.
- Fourteen of the G-20 nations are AIIB members including France, Germany, Italy and the United Kingdom.
AIIB Membership Criteria: Membership to the Asian Infrastructure Investment Bank (AIIB) is open to all members of the Asian Development Bank or the World Bank.
- The bank also allows non-sovereign entities to apply for membership provided their home countries are members.
Shareholder & Voting Right: In AIIB, China is the largest shareholder with 26.61 % voting shares in the Asian Infrastructure Investment Bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
- The regional members hold 75% of the total voting power in the Asian Infrastructure Investment Bank (AIIB).

AIIB aims to promote sustainable economic development, create wealth and augment infrastructure connectivity in Asia by investing in infrastructure & other productive sectors.
AIIB working towards fostering regional partnership & cooperation to address developmental challenges by working in tandem with other bilateral and multilateral developmental institutions.
Asian Infrastructure Investment Bank (AIIB) promotes investment in private & public capital for development purposes.
AIIB uses the resources at its disposal for funding development in the region, including projects that will contribute to the balanced economic growth of the region.
AIIB also works for promoting private investment in enterprises, activities, and projects contributing to economic development in the region wherever private capital is not available.

Voting Rights: India has a 7.6% shareholding of the AIIB. This makes India the second-largest shareholder in the Asian Infrastructure Investment Bank (AIIB), next only to China.
Infrastructure Financing: AIIB has approved more loans for India than any other member of the bank. The AIIB has funded 28 projects in India amounting to $6.7 billion.
- The projects in India span a range of sectors such as energy, water, transport, etc. including the Bangalore Metro Rail.
- Last year, the AIIB also approved a $356.67 million loan to the Indian government to support the expansion of the Chennai metro rail system.
- The bank has also given approval for $500 million for a COVID-19 Emergency Response Fund and Health Systems Preparedness Project in India.