The Shanghai-based New Development Bank (NDB), founded by BRICS nations, is working to meet its $30 billion lending target. Despite a strong AA credit rating, the multilateral institution faces challenges in matching the high lending leverage of established peers like the World Bank. The bank is now focusing on local currency financing to manage risks and support infrastructure in member economies.
The New Development Bank (NDB), often referred to as the BRICS Bank, stands at a critical juncture in its mission to reshape infrastructure financing for emerging economies. While the institution has established itself as a credible borrower with a solid AA credit rating, its ability to scale operations and match the massive lending portfolios of traditional institutions like the World Bank remains a work in progress.
It is important for readers to note that the NDB is a multilateral development institution and not a publicly traded company on the Indian stock exchanges. It functions on a capital-base model where its ability to lend is determined by its paid-in capital and institutional efficiency.
The core challenge the bank faces is a matter of leverage. Traditional development lenders, such as the World Bank, are designed to turn modest capital into vast loan portfolios. For example, the World Bank operates with a model that pairs significantly smaller amounts of paid-in capital with a much larger volume of outstanding loans. The NDB, however, remains more conservative, which limits its footprint. With total assets reported around $35.7 billion as of mid-2026, the bank is now working under a 2022–2026 strategy aimed at mobilizing $30 billion in financing, specifically targeting climate change and sustainable infrastructure.
Governance structures also play a significant role in this growth story. The current model reserves majority voting control for the founding BRICS members. While this protects the original vision of the bank, some analysts note that it may inadvertently create barriers to attracting the massive, diversified capital contributions needed from newer member nations to reach a global scale. Additionally, the bank is still building the deep institutional expertise required for complex project appraisals, environmental monitoring, and long-term risk management—areas where older institutions have had decades to refine their processes.
To overcome these hurdles and stay relevant, the NDB is shifting its tactical focus. A key part of this strategy is the expansion of local currency lending. By offering loans in currencies like the Indian Rupee or the South African Rand, the bank hopes to protect member nations from the volatility of foreign exchange markets. Plans for a rupee bond program in India serve as a prime example of this strategy, allowing the bank to mobilize resources domestically rather than relying solely on global debt markets.
For stakeholders and observers of infrastructure development, the primary monitorable will be the execution of this 2026 strategy. Success will depend on whether the bank can successfully navigate currency risks, increase its project pipeline, and balance the interests of founding members with the capital needs of its growing roster of new member countries.