The New Development Bank, set up by BRICS countries to lessen the influence of Western financial institutions, has announced its decision to temporarily end business with Russia, following its invasion of Ukraine. A statement issued from the bank’s headquarters in Shanghai China stated the institution’s resolution, citing “unfolding uncertainties and restrictions.”
The terse announcement reads “The New Development Bank (NDB) applies sound banking principles in all its operations, as stated in its Articles of Agreement. In light of unfolding uncertainties and restrictions, NDB has put new transactions in Russia on hold. NDB will continue to conduct business in full conformity with the highest compliance standards as an international institution.”
The New Development Bank was set up in 2014 by the BRICS countries comprising Brazil, Russia, India, China and South Africa- to support developmental and infrastructure projects in member countries. South Africa has contributed 25.5 billion rands to the bank since it started operations. Before the conflict began, the NDB backed projects in South Africa was to the tune of 82.7 billion rands, approximately $5.39 billion including project finance companies such as Eskom and Transnet. In April 2021, the bank approved a fresh $1billion loan for South Africa.
South Africa, as with other BRICS countries, have yet to place any direct sanctions on Russia but has called for immediate resolution of the conflict. All four countries abstained from voting when a United Nations resolution called for Russia’s immediate withdrawal from Ukraine.