India and SCO nations advance plans to establish new SCO Development Bank

India is taking notable steps to establish a new SCO Development Bank, with member nations moving towards finalizing the foundational documents for this crucial financial entity. Both Russia and Kazakhstan have shown interest in hosting the headquarters. The bank aims to finance collaborative economic projects while enhancing trade partnerships, marking a significant push for financial independence from traditional systems used for manipulation.

New Delhi: India is participating in negotiations to create a SCO Development Bank, said people familiar with the matter, underlining that the proposed financial institution secured the backing of all member states of the Shanghai Cooperation Organisation (SCO) at their just-concluded summit in Bishkek.

The SCO member states are currently in discussions for creating the bank's governance structure and capital, the people said.

The creation of the new bank also figured on the agenda when finance minister Nirmala Sitharaman met her Russian counterpart Anton Siluanov on the margins of the G20 Finance Ministers' meeting in the US earlier this week.

Building on initial agreements first pushed forward at the Tianjin SCO Summit, the Bishkek Summit declaration noted that member states agreed to finish consultations on the founding documents as quickly as possible. Host Kyrgyzstan has expressed interest in hosting the bank.

Russian President Vladimir Putin Monday called on SCO members to establish a development bank that would operate independently of financial systems that, he said, were being used as "weapons" to gain economic and geopolitical leverage.

Speaking at the summit in Bishkek, Putin said the proposed bank should be as independent as possible from financial systems of countries that use economic instruments to secure unilateral advantages in international affairs.

Putin said the bank could help finance "joint, mutually beneficial economic projects" among SCO members and strengthen financial and commercial ties within the grouping.

He noted that Russia's trade with SCO countries exceeded $400 billion last year, with national currencies accounting for more than 98% of Moscow's mutual settlements with SCO members.

Kazakhstan, Central Asia's biggest and richest state, has also expressed its interest to host the bank. Kazakh President Kassym-Jomart Tokayev in his speech at the SCO Summit offered to host the bank and its headquarters if member states reach a consensus.

"We consider it appropriate to direct the bank's resources primarily toward infrastructure, technological and industrial projects," said Tokayev. "If there is consensus among the member states, Kazakhstan could host this institution and its headquarters."