Leaders of the five BRICS nations agreed on the structure of a US$50 billion development bank by granting China its headquarters and India its first rotating presidency.
Brazil, Russia and South Africa were also granted posts or units in the new bank.
The leaders of Brazil, Russia, India, China and South Africa also formalised the creation of a US$100 billion currency exchange reserve, which member states can tap in case of balance of payment crises, according to a statement issued at a summit in Fortaleza, Brazil. Both initiatives, which require legislative approval, are designed to provide an alternative to financing from the International Monetary Fund and the World Bank, where BRICS countries have been seeking more say.
"The BRICS are gaining political weight and demonstrating their role in the international arena," Brazilian President Dilma Rousseff said after a signing ceremony.
Until the eve of the summit, India and South Africa had vied with China to host the headquarters of the bank, dubbed the New Development Bank.
The administration of Indian Prime Minister Narendra Modi gave in after it was reminded that his country's previous administration had agreed to Shanghai as the bank's headquarters, according to an Indian official.
Russian Finance Minister Anton Siluanov said the BRICS nations decided in favour of Shanghai because the city offers better infrastructure, opportunities to capture private funding and is home to more investors than the competitors.
Chinese media yesterday hailed the creation of the development bank, and blamed Western countries and multilateral agencies for flaws in the global financial system.
"The plans of the emerging-market bloc of BRICS to establish a development bank usher in a long-awaited and helpful alternative to the Western-dominated institutes in global finance," Xinhua said in an editorial.
An opinion piece in the Global Times newspaper, known for its nationalistic editorial stance, said competition from the BRICS bank could prompt the World Bank and the International Monetary Fund (IMF) to carry out much-needed internal reforms.
"BRICS countries have to blaze a new trail to reduce losses as well as safeguard interests," wrote Liu Zongyi, a research fellow at the government-linked Shanghai Institute for International Studies. "Loans from the World Bank are not able to meet the demands of the developing nations ...
"The IMF also failed to play an active role in stabilising the turbulent emerging financial markets during the global financial crisis."
For President Xi Jinping , the meetings represent a new push by Beijing to gain influence in a region traditionally seen as a US backyard.
Agence France-Presse, Bloomberg