India-China friction has not impacted AIIB's functioning, says VP Pandey

Business Standard

5 hours ago

Frictions between India and China have not affected the functioning and growth of the Asian Infrastructure Investment Bank (AIIB), where both countries are the top two investors, the bank's Vice President of Investment Solutions Ajay Bhushan Pandey has said.
In a detailed interview with PTI Videos here, Pandey, a former finance secretary and CEO of Aadhaar, sought to dispel the impression that the AIIB was a Chinese bank and said it truly emerged as a multilateral development bank (MDB) with well-established governing structures.
According to the bank's official data, China is the largest shareholder of the AIIB with 26.54 per cent voting shares. India is the second-largest shareholder with 7.58 per cent, followed by Russia with 5.9 per cent and Germany with 4.1 per cent.
In his nearly hour-long interview, Pandey addressed a range of questions, including whether India-China tensions and the absence of influential countries like the US and Japan impacted the bank.
Pandey, who took over as Vice President of Investment Solutions of the bank in April this year, said differences and frictions between India and China have not impacted the bank's functioning in any way.
"MDBs are supposed to be professional organisations. The countries may have political differences, but when they sit at the table on the bank, you know, they are governed by their own economic interests," Pandey said.
"At any given point in the world, you know, there are always some geopolitical tensions between some countries or a group of countries," Pandey said.
"Outside the bank and the other political space and in the media space, countries' behaviours towards each other may be very different, but it is not reflected in the bank's functioning," he said.
The countries may have political and other differences, but those differences do not get reflected in the bank's functioning, he said.
The Beijing-headquartered AIIB, established in 2016, is holding its 10th annual meeting of the board of governors from Tuesday to Thursday here. The meeting is being attended by a host of top officials from its 100 member countries.
As the Vice President of Investment Solutions, Pandey oversees the Sectors, Themes and Finance Solutions Department (STF), the Sustainability and Fiduciary Solutions Department (SFD) and the Portfolio Management Department (PMD).
I also heard this before I joined here when I was (India's finance secretary), and I used to hear this, he said, replying to a question about the AIIB being regarded as a Chinese bank, as it was initially sponsored by it.
But if you look at...the governance structure of this bank, the governance structure is that any major decision in this in the bank is taken by the supermajority. That supermajority is 75 per cent of the vote, Pandey said.
The governing structure of the bank is such that it should allay apprehension that the AIIB is a Chinese bank, he said.
India is the largest borrower, right? So, can anyone infer that it is a bank of one particular country?" Pandey asked.
The bank's 670 employees have been drawn from different countries, including those from the US and Japan who are not members of the bank, he said.
Over 60 Indians are employed in several positions in the bank.
Also, the projects are chosen through the best practices, he said.
"If you look at these points, I will leave it to any neutral observer, having the impression that this particular bank is driven by one country, or it is a one-country bank," he said.
The AIIB has 100 full members, 110 approved members from six continents representing 81 per cent of the world population and 65 per cent of global GDP, according to the bank's official data.
In the last nine years, the bank has approved 310 projects amounting to about USD 60 billion in funding in 38 member countries, with India topping the list with USD 11 billion.
On India's participation in the bank, Pandey said, "If you look at India's participation in the AIIB...if you look at the entire Asian region, India is one of the dominant players." "Somewhere around 2014-15, when the talk was going on about having a bank like AIIB, India participated. And India is the second-largest shareholder in this bank," he said.
On the project funding obtained by India, Pandey said if you see India's portfolio today is about USD 11 billion.
Pandey also paid rich tributes to the leadership provided by the outgoing founder President of the Bank, Jin Liqun.
Jin has united 110 countries to create institutions that serve the global public goodan extraordinary contribution in a divided world, he said.