The leaders of Brazil, Russia, India, China and South Africa (BRICS) on Thursday launched a new bank that experts say could challenge the World Bank as the chief international lending institution.

The New Development Bank (NDB), which was launched during the seventh BRICS summit in the city of Ufa, Russia, is the first institution to be created by the bloc of emerging economies and experts say it is a crucial step to realizing the objectives of economic cooperation that inspired the formation of the group.

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According to China Central Television, the new bank, which is set to begin operations in the beginning of next year, has an initial capital of $50 billion. All five countries are reported to have already deposited their share of the bank's initial capital. The funds, which will be used to support sustainable developmental projects, will also serve as a reserve for member countries. Plans have been announced to double the bank's initial capital within two years.

The New Development Bank will have its headquarters in Shanghai and its first regional branch in South Africa. The president of the bank, K.V. Kamath, has expressed confidence in the capacity of the institution. Leaders of BRICS countries are set to reach an agreement on the projects that priority financing will be given to, Xinhua reported. The bank is expected to give out its first loan by April 2016.

The new bank is only one of several milestones to be reached at the two-day BRICS summit. Leaders of the five countries are expected to sign a series of economic agreements and formulate the BRICS Economic Partnership Strategy.

President Xi Jingping, who is representing China at the summit, has met with the leaders of other BRICS nations as well as Mongolian President Tsakhiagiin Elbegdorj and underscored the value of cooperation to his counterparts.

"We need to build a partnership for common development. For the purpose of building a value chain of shared benefits and a big market of integrated interests. We should build an even closer partnership, leverage our complementary strengths in resource endowment and industrial structures, and expand our development horizons through collective efforts," he said, while addressing other leaders of BRICS countries. During his meeting with the Mongolian president, Xi spoke of the need for cooperation, explaining that as neighbors, both nations need to support one another and build mutual trust.

On Friday, leaders of member countries of the Shanghai Cooperative Organization (SCO) are expected to meet and formulate a strategy for the development of the organization over the next 10 years. During the meeting, India and Pakistan will be formally admitted into the SCO, according to The National.

TagsBRICS, New Development Bank (NDB), K.V. Kamath, Shanghai Cooperative Organization (SCO), BRICS Economic Partnership Strategy