Representatives of 50 founding countries signed an agreement on Monday for the China-led $100 billion Asian Infrastructure Investment Bank (AIIB).
China holds the largest share with $29.8 billion (30.34 per cent stake) that will give it 26.06 per cent voting rights and veto powers over major decisions, reported AsiaOne. India and Russia are second and third largest shareholders, with US$8.3 billion and US$6.5 billion share, respectively.
The delegates from AIIB's 50 founding member countries gathered at the Great Hall of the People in Beijing for the official signing ceremony on Monday, according to BBC.
"Our motivation ( for setting up the bank) was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their cooperation," Chinese President Xi Jinping said in signing ceremony, according to Financial Times.
"This is China assuming more international responsibility for the development of the Asia and global economies," Chinese finance minister Lou Jiwei said.
The new bank is expected to be operational by the end of 2015, according to an AIIB statement. Seven more countries are due to join AIIB by the end of the year.
AIIB will have an initial authorised capital stock of $100 billion and will be headquartered in Beijing, the statement said. Regional countries hold a majority of stakes, with 75 percent of initial capital.
Analysts consider AIIB a potential rival to World Bank and International Monetary Fund (IMF). The international organisations like World Bank, however, welcomed the initiative.
"The developing world's infrastructure investment needs are too huge for any single institution. The world spends about US$1 trillion a year on infrastructure, but the vast majority of that goes to developed countries. Emerging markets and low-income countries face an annual gap of US$1 trillion to US$1.5 trillion in infrastructure spending," World Bank group president Jim Yong Kim said, according to Xinhua.
AIIB was proposed by Chinese president Xi Jinping in 2013. It was established in October 2014 with an agreement signed by 21 countries.
The bank is expected to focus on infrastructure development in Asia. It will provide funds for the development of road systems, telecommunications and other infrastructure projects in Asian countries.
