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What is Asian Infrastructure Investment Bank (AIIB) ?

N.K. Chauhan in International Relations
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Apr 05, 2020, Updated: May 26, 2022 · 2 min. read

Former Reserve Bank of India (RBI) governor Urjit Patel has been appointed vice-president of the Beijing-based AIIB.

Mr. Patel will serve a three-year term as one of the five vice-presidents, and will take the place of former Gujarat Chief Secretary D.J. Pandian.

The AIIB has approved more loans for India than any other member of the bank.

Asian Infrastructure Investment Bank (AIIB)

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that provides financing for the building of infrastructure and improve social and economic outcomes in the Indo-Pacific region (Asia).

The idea of Asian Infrastructure Investment Bank (AIIB) was first proposed by China's leader Xi Jinping at an Asia-Pacific Economic Cooperation (APEC) summit in Bali in 2013.

The bank is governed by a multilateral treaty, "AIIB Articles of Agreement" entered into force Dec 25, 2015, the treaty was signed by 57 founding members.

It is headquartered in Beijing and have 104 approved members worldwide; the U.S. and Japan are not among its members.

All the powers of the AIIB are vested in the Board of Governors, the Board of Governors consists of one Governor and one Alternate Governor appointed by each member country.

AIIB staff is headed by the President who is elected by AIIB shareholders for a five-year term and eligible for reelection once.

The AIIB has signed a co-financing framework agreement with the World Bank and three non-binding Memorandum of Understanding (MOU) with Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

India is the largest beneficiary of AIIB financing for infrastructure projects with a total loan of USD 6.7 billion for 28 projects.

It received the highest credit ratings from the three biggest rating agencies in the world, and is seen as a potential rival to the World Bank and IMF.


Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.

Unlike other multilateral development bank, the AIIB allows for non-sovereign entities to apply for AIIB membership, assuming their home country is a member.

Approximately half of NATO and nearly every large Asian country has signed on, with the exception of Japan.

Fourteen members of the bank comes from the G-20 nations including France, Germany, Italy and the United Kingdom.

The starting capital of the bank was USD 100 billion, equivalent to 2/3 of the capital of the "Asian Development Bank" and about half that of the "World Bank".

China is the largest contributor to the Bank by contributing, half of the initial subscribed capital (USD 50 billion), while India is the second-largest shareholder, contributing USD 8.4 billion.

The regional members hold 75% of the total voting power in the Bank, where China is the largest shareholder with 26.61% voting shares followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).

Last seen in news on: Jan 12, 2022
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