China's Parliament ratifies AIIB agreement
China’s Parliament has ratified the Asian Infrastructure Investment Bank (AIIB) agreement which establishes the legal framework for the Bank.
The ratification by China, which is the bank’s largest shareholder is considered significant step closer to the AIIB’s formal establishment.
Earlier in June 2015, 54 founding members of the bank had signed the 60-article agreement provides the legal framework for Institution of AIIB. While, the remaining members are expected to sign before the end of 2015.
It is mandatory for all prospective members of AIIB ratify the agreement before the end of 2016 by their respective top legislatures to formally become its founding members.
It should be noted that India is also a founder member of AIIB which is tasked to finance infrastructure development projects across Asia.
Asian Infrastructure Investment Bank (AIIB)
- Established to finance infrastructure projects including energy, transport and infrastructure projects in Asia.
- AIIB is seen as a rival to the World Bank and Asian Development Bank (ADB) which managed by most prominent countries like US, Japan and European etc.
- Headquarters: It will be operational by end of 2015.
- Authorized capital: It will be of 100 billion US dollars. The initial subscribed capital will be around 50 billion US Dollar and the paid-in ratio will be 20 per cent.
- Regional character of the Bank: Its regional members (Asian) will be the holding around 75 percent of shares i.e. they will be majority shareholders.
- They have been allocated their capital share on quota basis i.e. based on their economic size.
- Voting share: for each member country it is based on the size of their economy and not on authorised capital share to the Bank.