Editorial-13/09/2026
BRICS Bank: The Alternative That Fell Short
The creation of the New Development Bank (NDB) in 2015 was among the most ambitious institutional projects of the BRICS grouping. It promised to challenge the dominance of the World Bank, provide developing countries with development finance free from excessive political conditionalities, and promote a more balanced global financial order. Alongside it, the Contingent Reserve Arrangement (CRA) was designed to provide a financial safety net independent of the International Monetary Fund (IMF).
Yet, more than a decade later, the promise has exceeded the performance. T
he NDB has financed important infrastructure and sustainable-development projects, while BRICS has strengthened the political voice of the Global South. However, the grouping has not created an autonomous financial architecture. The NDB continues to depend significantly on dollar-based financing, international capital markets and Western credit-rating agencies. The CRA remains unused and tied to IMF-linked conditions. The larger project of de-dollarisation has also been weakened by divergent interests among BRICS members.
The BRICS bank, therefore, has not failed completely. It has fallen short of its original ambition. It is a useful supplementary institution, but not yet a genuine alternative to the Bretton Woods system.
The Promise of a New Financial Order
The post-Second World War global financial system was built around the IMF and the World Bank. Although these institutions were established in the name of international economic stability and reconstruction, their governance structures have remained heavily influenced by the developed West.
Voting power in the IMF and World Bank is linked to financial contributions. This has meant that emerging economies, despite accounting for a growing share of global production, trade and population, have exercised limited influence over major decisions. Developing countries have also criticised the policy conditions attached to IMF lending, including fiscal austerity, structural reforms and market-oriented adjustments.
The 2008 global financial crisis deepened dissatisfaction with this system. The crisis originated in advanced financial markets but imposed severe costs on developing economies. It exposed the vulnerability of countries dependent on the dollar and Western financial institutions. At the same time, China, India, Brazil, Russia and South Africa were acquiring greater economic weight and seeking a larger role in global governance.
BRICS emerged from this context. Its agenda was not initially directed towards replacing the global order. However, over time, it became a platform for challenging the unequal distribution of power in international institutions.
The establishment of the NDB and the CRA at the 2014 Fortaleza Summit represented the institutionalisation of this challenge. The NDB was expected to finance infrastructure and sustainable development, while the CRA was intended to provide emergency liquidity to members facing balance-of-payments pressures.
The political message was clear: developing countries could create institutions reflecting their own priorities, governance principles and developmental experiences.
The New Development Bank
The NDB began operations in 2015 with an authorised capital of $100 billion and an initial subscribed capital of $50 billion. Its founding members—Brazil, Russia, India, China and South Africa—were given equal voting rights. This arrangement was important because it avoided the direct domination of the largest economy, at least formally.
The bank’s mandate was to mobilise resources for infrastructure and sustainable-development projects in BRICS countries and other emerging economies. It sought to focus on areas such as transport, renewable energy, water supply, sanitation, urban development and digital infrastructure.
The NDB has financed several significant projects. These include India’s Delhi–Ghaziabad–Meerut Regional Rapid Transit System, renewable-energy projects in China, water and sanitation initiatives in Brazil and port-related infrastructure in South Africa. By the end of 2025, the bank had approved projects worth approximately $42.9 billion across 139 projects.
Its expansion beyond the original five members also indicates wider interest in the institution. New members and prospective members view the NDB as an additional source of development finance, particularly at a time when infrastructure requirements in the Global South are enormous.
The bank has also attempted to increase local-currency lending. Financing in local currencies can reduce exposure to exchange-rate volatility and help borrowers avoid the accumulation of dollar-denominated debt. For developing countries, this is an important objective because depreciation of the domestic currency can sharply increase the real burden of external loans.
These achievements should not be dismissed. The NDB has demonstrated that emerging economies can establish a multilateral development bank with relatively balanced governance. It has also offered developing countries an additional institutional choice.
However, an additional choice is not the same as a complete alternative.
Why the NDB Fell Short
The central weakness of the NDB is its structural dependence on the financial system it was expected to challenge.
Dependence on the dollar
The NDB raises a significant portion of its resources through international bond markets. These markets remain heavily dollar-centric. Approximately half of the bank’s outstanding bonds are reportedly denominated in U.S. dollars, while much of the remaining share is linked to the Chinese yuan. The South African rand accounts for only a very small proportion. Local-currency lending stood at roughly 22% by mid-2025, below the stated target of 30% for 2026.
This reveals the difficulty of rapidly escaping the dollar-based system. The dollar continues to offer deep liquidity, global acceptability and relatively lower transaction costs. Investors also regard dollar-denominated securities as more familiar and less risky.
As a result, even an institution established to reduce dollar dependence must use the dollar to raise affordable capital. This is not merely a contradiction of rhetoric; it is a reflection of the structure of global finance.
Reliance on Western credit ratings
The NDB also depends on international credit-rating agencies such as S&P, Fitch and Moody’s. These ratings influence the interest rates at which the bank can borrow. A lower rating would increase the cost of capital and reduce the bank’s ability to provide affordable loans.
This dependence gives Western-based financial institutions indirect influence over a bank created by the Global South. If the NDB wishes to access major international capital markets, it must conform to prevailing expectations regarding risk, transparency, governance and financial discipline.
Such standards are not necessarily undesirable. Sound risk assessment and transparency are essential for any development bank. But the larger question is whether the NDB possesses an independent financial ecosystem capable of supporting its expansion. At present, it does not.
Limited scale
The NDB’s financial scale remains modest compared with the World Bank Group. Its project approvals of around $42.9 billion by the end of 2025 are significant for a young institution, but they remain small in relation to the World Bank’s annual commitments, which are close to $100 billion.
The infrastructure and development needs of the Global South run into trillions of dollars. Roads, railways, ports, renewable energy, water systems, digital networks and climate adaptation require financing on a much larger scale.
The NDB cannot yet substitute for the World Bank, regional development banks or private capital markets. It functions more realistically as a complementary institution.
The Russia episode
The NDB’s response to the Russia–Ukraine conflict also exposed its dependence on the existing global financial order. In March 2022, the bank suspended new transactions in Russia in order to protect its financial standing and international market access.
From a banking perspective, this decision was understandable. A development bank must preserve its creditworthiness and protect the interests of bondholders. But politically, it demonstrated that the NDB could not function independently of Western sanctions, financial restrictions and market perceptions.
An institution that cannot finance a founding member during a major geopolitical crisis has limited ability to claim strategic autonomy. The episode showed that financial independence is not produced merely by creating a new bank. It requires alternative payment systems, insurance arrangements, credit-rating mechanisms, settlement infrastructure and sufficient capital depth.
The CRA: A Safety Net Without Autonomy
The CRA was designed with an authorised size of $100 billion. Its objective was to provide short-term liquidity support to BRICS members facing external financial stress.
In principle, the CRA could have reduced dependence on the IMF. During currency crises, developing countries often approach the IMF because it possesses established surveillance systems, emergency lending facilities and international credibility. The CRA was expected to offer a BRICS-based alternative.
In practice, however, the CRA has never been activated. Members seeking more than 30% of their allocated amount must first enter into an IMF programme.
This condition is a fundamental limitation. If a country must approach the IMF before drawing a substantial amount from the CRA, the arrangement cannot serve as a fully independent alternative to the IMF.
The CRA also lacks several features required for an effective crisis-management institution. It does not have a strong permanent bureaucracy, an independent surveillance capacity or a fully developed research wing. Consequently, it remains more a political statement than a functional monetary safety net.
The difference between the NDB and the CRA is instructive. The NDB has undertaken real lending and built a functioning institutional presence. The CRA, by contrast, has remained largely inactive. Its existence signals dissatisfaction with the IMF, but its design continues to depend on the IMF.
De-dollarisation: Ambition and Contradiction
BRICS discussions on de-dollarisation have received considerable attention. The dominance of the U.S. dollar exposes developing countries to several risks:
Yet, more than a decade later, the promise has exceeded the performance. T
he NDB has financed important infrastructure and sustainable-development projects, while BRICS has strengthened the political voice of the Global South. However, the grouping has not created an autonomous financial architecture. The NDB continues to depend significantly on dollar-based financing, international capital markets and Western credit-rating agencies. The CRA remains unused and tied to IMF-linked conditions. The larger project of de-dollarisation has also been weakened by divergent interests among BRICS members.
The BRICS bank, therefore, has not failed completely. It has fallen short of its original ambition. It is a useful supplementary institution, but not yet a genuine alternative to the Bretton Woods system.
The Promise of a New Financial Order
The post-Second World War global financial system was built around the IMF and the World Bank. Although these institutions were established in the name of international economic stability and reconstruction, their governance structures have remained heavily influenced by the developed West.
Voting power in the IMF and World Bank is linked to financial contributions. This has meant that emerging economies, despite accounting for a growing share of global production, trade and population, have exercised limited influence over major decisions. Developing countries have also criticised the policy conditions attached to IMF lending, including fiscal austerity, structural reforms and market-oriented adjustments.
The 2008 global financial crisis deepened dissatisfaction with this system. The crisis originated in advanced financial markets but imposed severe costs on developing economies. It exposed the vulnerability of countries dependent on the dollar and Western financial institutions. At the same time, China, India, Brazil, Russia and South Africa were acquiring greater economic weight and seeking a larger role in global governance.
BRICS emerged from this context. Its agenda was not initially directed towards replacing the global order. However, over time, it became a platform for challenging the unequal distribution of power in international institutions.
The establishment of the NDB and the CRA at the 2014 Fortaleza Summit represented the institutionalisation of this challenge. The NDB was expected to finance infrastructure and sustainable development, while the CRA was intended to provide emergency liquidity to members facing balance-of-payments pressures.
The political message was clear: developing countries could create institutions reflecting their own priorities, governance principles and developmental experiences.
The New Development Bank
The NDB began operations in 2015 with an authorised capital of $100 billion and an initial subscribed capital of $50 billion. Its founding members—Brazil, Russia, India, China and South Africa—were given equal voting rights. This arrangement was important because it avoided the direct domination of the largest economy, at least formally.
The bank’s mandate was to mobilise resources for infrastructure and sustainable-development projects in BRICS countries and other emerging economies. It sought to focus on areas such as transport, renewable energy, water supply, sanitation, urban development and digital infrastructure.
The NDB has financed several significant projects. These include India’s Delhi–Ghaziabad–Meerut Regional Rapid Transit System, renewable-energy projects in China, water and sanitation initiatives in Brazil and port-related infrastructure in South Africa. By the end of 2025, the bank had approved projects worth approximately $42.9 billion across 139 projects.
Its expansion beyond the original five members also indicates wider interest in the institution. New members and prospective members view the NDB as an additional source of development finance, particularly at a time when infrastructure requirements in the Global South are enormous.
The bank has also attempted to increase local-currency lending. Financing in local currencies can reduce exposure to exchange-rate volatility and help borrowers avoid the accumulation of dollar-denominated debt. For developing countries, this is an important objective because depreciation of the domestic currency can sharply increase the real burden of external loans.
These achievements should not be dismissed. The NDB has demonstrated that emerging economies can establish a multilateral development bank with relatively balanced governance. It has also offered developing countries an additional institutional choice.
However, an additional choice is not the same as a complete alternative.
Why the NDB Fell Short
The central weakness of the NDB is its structural dependence on the financial system it was expected to challenge.
Dependence on the dollar
The NDB raises a significant portion of its resources through international bond markets. These markets remain heavily dollar-centric. Approximately half of the bank’s outstanding bonds are reportedly denominated in U.S. dollars, while much of the remaining share is linked to the Chinese yuan. The South African rand accounts for only a very small proportion. Local-currency lending stood at roughly 22% by mid-2025, below the stated target of 30% for 2026.
This reveals the difficulty of rapidly escaping the dollar-based system. The dollar continues to offer deep liquidity, global acceptability and relatively lower transaction costs. Investors also regard dollar-denominated securities as more familiar and less risky.
As a result, even an institution established to reduce dollar dependence must use the dollar to raise affordable capital. This is not merely a contradiction of rhetoric; it is a reflection of the structure of global finance.
Reliance on Western credit ratings
The NDB also depends on international credit-rating agencies such as S&P, Fitch and Moody’s. These ratings influence the interest rates at which the bank can borrow. A lower rating would increase the cost of capital and reduce the bank’s ability to provide affordable loans.
This dependence gives Western-based financial institutions indirect influence over a bank created by the Global South. If the NDB wishes to access major international capital markets, it must conform to prevailing expectations regarding risk, transparency, governance and financial discipline.
Such standards are not necessarily undesirable. Sound risk assessment and transparency are essential for any development bank. But the larger question is whether the NDB possesses an independent financial ecosystem capable of supporting its expansion. At present, it does not.
Limited scale
The NDB’s financial scale remains modest compared with the World Bank Group. Its project approvals of around $42.9 billion by the end of 2025 are significant for a young institution, but they remain small in relation to the World Bank’s annual commitments, which are close to $100 billion.
The infrastructure and development needs of the Global South run into trillions of dollars. Roads, railways, ports, renewable energy, water systems, digital networks and climate adaptation require financing on a much larger scale.
The NDB cannot yet substitute for the World Bank, regional development banks or private capital markets. It functions more realistically as a complementary institution.
The Russia episode
The NDB’s response to the Russia–Ukraine conflict also exposed its dependence on the existing global financial order. In March 2022, the bank suspended new transactions in Russia in order to protect its financial standing and international market access.
From a banking perspective, this decision was understandable. A development bank must preserve its creditworthiness and protect the interests of bondholders. But politically, it demonstrated that the NDB could not function independently of Western sanctions, financial restrictions and market perceptions.
An institution that cannot finance a founding member during a major geopolitical crisis has limited ability to claim strategic autonomy. The episode showed that financial independence is not produced merely by creating a new bank. It requires alternative payment systems, insurance arrangements, credit-rating mechanisms, settlement infrastructure and sufficient capital depth.
The CRA: A Safety Net Without Autonomy
The CRA was designed with an authorised size of $100 billion. Its objective was to provide short-term liquidity support to BRICS members facing external financial stress.
In principle, the CRA could have reduced dependence on the IMF. During currency crises, developing countries often approach the IMF because it possesses established surveillance systems, emergency lending facilities and international credibility. The CRA was expected to offer a BRICS-based alternative.
In practice, however, the CRA has never been activated. Members seeking more than 30% of their allocated amount must first enter into an IMF programme.
This condition is a fundamental limitation. If a country must approach the IMF before drawing a substantial amount from the CRA, the arrangement cannot serve as a fully independent alternative to the IMF.
The CRA also lacks several features required for an effective crisis-management institution. It does not have a strong permanent bureaucracy, an independent surveillance capacity or a fully developed research wing. Consequently, it remains more a political statement than a functional monetary safety net.
The difference between the NDB and the CRA is instructive. The NDB has undertaken real lending and built a functioning institutional presence. The CRA, by contrast, has remained largely inactive. Its existence signals dissatisfaction with the IMF, but its design continues to depend on the IMF.
De-dollarisation: Ambition and Contradiction
BRICS discussions on de-dollarisation have received considerable attention. The dominance of the U.S. dollar exposes developing countries to several risks:
- Exchange-rate volatility can increase the cost of external debt.
- U.S. monetary policy affects capital flows across emerging markets.
- Dollar-based sanctions can restrict trade and financial transactions.
- Countries holding large dollar reserves remain vulnerable to decisions taken in Washington.
BRICS members have therefore discussed local-currency settlements, greater use of national currencies in trade and alternative payment mechanisms.
However, de-dollarisation is difficult because BRICS members do not share identical objectives.
China supports the gradual internationalisation of the yuan. Russia, particularly after sanctions, has strong incentives to reduce dollar dependence. India seeks greater strategic autonomy but is cautious about replacing one form of dependence with another. South Africa has also expressed concern about the economic and geopolitical risks of an abrupt monetary challenge to the dollar.
India has rejected the idea of a common BRICS currency. A common currency would require extensive monetary coordination, fiscal discipline, exchange-rate management and political trust. The European Union’s experience shows that monetary integration is a complex and long-term process even among relatively integrated economies.
BRICS countries also have different trade patterns, inflation rates, capital controls and financial systems. Their political relations are not free from tensions. India and China, for example, have unresolved border and strategic differences. Under such circumstances, a common currency would be unrealistic.
The absence of a unified monetary strategy has weakened the de-dollarisation agenda. The 2025 Rio declaration did not place de-dollarisation at the centre of its official framework.
The lesson is that de-dollarisation cannot be achieved by declarations alone. It requires deep and liquid alternative financial markets, stable currencies, reliable payment infrastructure and confidence among investors.
Reforming Rather Than Replacing Bretton Woods
The most revealing evidence of BRICS’ limited ambition lies in its own official declarations.
At the 2024 Kazan and 2025 Rio summits, BRICS called for reform of the IMF and a more representative global financial architecture. It sought a better distribution of quotas and voting rights, greater representation for developing countries and a more adequately resourced IMF.
These demands are legitimate. The IMF’s governance structure does not reflect present-day economic realities. The United States possesses 16.49% of the IMF’s voting rights, while major decisions require an 85% supermajority. This gives Washington an effective veto over important reforms.
But demanding reform is different from building a replacement.
BRICS members continue to use the IMF, World Bank and established financial markets. They seek greater influence within the existing order rather than a complete break from it. This is understandable because the existing institutions possess capital, expertise, operational capacity and global legitimacy.
The contradiction is therefore not that BRICS has abandoned its objectives. Rather, its objectives have gradually become more pragmatic. It wants a more multipolar system, not necessarily an entirely separate one.
The Structural Reasons for Failure
The NDB and CRA have fallen short for several broader reasons.
Divergent national interests
BRICS is not a unified political or economic bloc. Its members differ in political systems, economic models, strategic priorities and relations with the United States.
China seeks a greater international role for the yuan. Russia wants protection from Western sanctions. India supports multipolarity but prefers strategic flexibility. Brazil seeks development finance and diplomatic autonomy. South Africa emphasises the interests of Africa and the Global South.
These objectives overlap, but they do not produce a single financial strategy.
Unequal economic power
Although BRICS formally emphasises equality, its members are not economically equal. China is far larger than the other members in trade, reserves, industrial capacity and financial resources. Other countries may support alternative institutions but remain concerned about excessive dependence on Chinese capital or the yuan.
This complicates the creation of a genuinely balanced financial architecture.
Absence of institutional trust
A successful monetary or financial union requires a high level of trust. BRICS members have not yet developed common rules for capital flows, financial disclosure, crisis management or dispute settlement.
Without trust, members are unlikely to pool reserves or expose their currencies to collective management.
Fear of economic retaliation
Countries seeking to reduce dependence on the dollar may face trade, financial or diplomatic pressure. Reports of possible additional U.S. tariff measures against countries pursuing anti-American BRICS policies demonstrated the potential cost of a confrontational strategy.
For many developing economies, access to Western markets remains more important than symbolic financial autonomy. This explains why BRICS has adopted gradualism rather than a direct challenge to the dollar.
Why the NDB Still Matters
The fact that the NDB is not a complete alternative does not make it irrelevant.
First, it expands the choices available to developing countries. Borrowers are no longer dependent on a single group of institutions. Competition among development banks can improve financing terms and encourage greater responsiveness to local needs.
Second, the NDB has introduced a more balanced governance model. Equal representation among the founding members challenges the principle that economic power must automatically translate into institutional dominance.
Third, the bank has helped normalise infrastructure financing in local currencies. Even limited local-currency lending can build expertise, develop bond markets and reduce exchange-rate risks over time.
Fourth, the NDB can support climate adaptation and sustainable development. Developing countries often struggle to access climate finance because existing mechanisms are slow, conditional or insufficiently responsive to local priorities.
Finally, the NDB has symbolic importance. Institutions shape political imagination. The existence of a Global South development bank demonstrates that the international financial order is not permanently fixed.
Its success should therefore be measured not only by whether it replaces the World Bank, but also by whether it improves the bargaining position of developing countries.
The Way Forward
BRICS should avoid exaggerated claims of having already created a new financial order. A realistic strategy would focus on building a parallel and more pluralistic system gradually.
Strengthen local-currency financing
The NDB should expand lending in the currencies of borrowing countries. This requires deeper local bond markets, reliable currency-conversion mechanisms and suitable hedging instruments.
Build independent payment infrastructure
BRICS should develop payment systems that are interoperable, secure and transparent. The objective should not necessarily be to immediately replace SWIFT, but to ensure that financial connectivity is not controlled by a single geopolitical centre.
Establish credible credit-rating capacity
A BRICS-based rating system could provide an additional assessment of development projects and sovereign borrowers. It must, however, maintain professional independence. A rating agency perceived as politically controlled would not attract investors.
Make the CRA functional
The CRA needs permanent staff, independent surveillance, a research wing and faster disbursement procedures. The IMF-linked requirement for substantial withdrawals should be reconsidered if the CRA is to become a true alternative safety net.
Increase capitalisation
The NDB must expand its capital base and mobilise private investment without compromising developmental objectives. Cooperation with regional development banks can help increase its reach.
Pursue gradual de-dollarisation
A sudden attack on the dollar is neither practical nor desirable. BRICS should instead promote diversification through local-currency trade, currency swaps, alternative reserve assets and regional financial cooperation.
Improve internal coordination
BRICS needs clear rules for decision-making, dispute settlement and financial transparency. Expansion should not come at the expense of institutional coherence.
India’s Role
India occupies a distinctive position in the BRICS debate. It supports a multipolar world and greater representation for developing countries, but it does not favour a bloc-based confrontation with the West.
This approach is strategically sensible. India benefits from cooperation with BRICS in areas such as development finance, local-currency settlements, energy security, technology and reform of global institutions. At the same time, India has deep trade, technological and strategic relations with the United States, Europe and other advanced economies.
India should therefore promote a practical agenda rather than an ideological one. Its priorities could include:
However, de-dollarisation is difficult because BRICS members do not share identical objectives.
China supports the gradual internationalisation of the yuan. Russia, particularly after sanctions, has strong incentives to reduce dollar dependence. India seeks greater strategic autonomy but is cautious about replacing one form of dependence with another. South Africa has also expressed concern about the economic and geopolitical risks of an abrupt monetary challenge to the dollar.
India has rejected the idea of a common BRICS currency. A common currency would require extensive monetary coordination, fiscal discipline, exchange-rate management and political trust. The European Union’s experience shows that monetary integration is a complex and long-term process even among relatively integrated economies.
BRICS countries also have different trade patterns, inflation rates, capital controls and financial systems. Their political relations are not free from tensions. India and China, for example, have unresolved border and strategic differences. Under such circumstances, a common currency would be unrealistic.
The absence of a unified monetary strategy has weakened the de-dollarisation agenda. The 2025 Rio declaration did not place de-dollarisation at the centre of its official framework.
The lesson is that de-dollarisation cannot be achieved by declarations alone. It requires deep and liquid alternative financial markets, stable currencies, reliable payment infrastructure and confidence among investors.
Reforming Rather Than Replacing Bretton Woods
The most revealing evidence of BRICS’ limited ambition lies in its own official declarations.
At the 2024 Kazan and 2025 Rio summits, BRICS called for reform of the IMF and a more representative global financial architecture. It sought a better distribution of quotas and voting rights, greater representation for developing countries and a more adequately resourced IMF.
These demands are legitimate. The IMF’s governance structure does not reflect present-day economic realities. The United States possesses 16.49% of the IMF’s voting rights, while major decisions require an 85% supermajority. This gives Washington an effective veto over important reforms.
But demanding reform is different from building a replacement.
BRICS members continue to use the IMF, World Bank and established financial markets. They seek greater influence within the existing order rather than a complete break from it. This is understandable because the existing institutions possess capital, expertise, operational capacity and global legitimacy.
The contradiction is therefore not that BRICS has abandoned its objectives. Rather, its objectives have gradually become more pragmatic. It wants a more multipolar system, not necessarily an entirely separate one.
The Structural Reasons for Failure
The NDB and CRA have fallen short for several broader reasons.
Divergent national interests
BRICS is not a unified political or economic bloc. Its members differ in political systems, economic models, strategic priorities and relations with the United States.
China seeks a greater international role for the yuan. Russia wants protection from Western sanctions. India supports multipolarity but prefers strategic flexibility. Brazil seeks development finance and diplomatic autonomy. South Africa emphasises the interests of Africa and the Global South.
These objectives overlap, but they do not produce a single financial strategy.
Unequal economic power
Although BRICS formally emphasises equality, its members are not economically equal. China is far larger than the other members in trade, reserves, industrial capacity and financial resources. Other countries may support alternative institutions but remain concerned about excessive dependence on Chinese capital or the yuan.
This complicates the creation of a genuinely balanced financial architecture.
Absence of institutional trust
A successful monetary or financial union requires a high level of trust. BRICS members have not yet developed common rules for capital flows, financial disclosure, crisis management or dispute settlement.
Without trust, members are unlikely to pool reserves or expose their currencies to collective management.
Fear of economic retaliation
Countries seeking to reduce dependence on the dollar may face trade, financial or diplomatic pressure. Reports of possible additional U.S. tariff measures against countries pursuing anti-American BRICS policies demonstrated the potential cost of a confrontational strategy.
For many developing economies, access to Western markets remains more important than symbolic financial autonomy. This explains why BRICS has adopted gradualism rather than a direct challenge to the dollar.
Why the NDB Still Matters
The fact that the NDB is not a complete alternative does not make it irrelevant.
First, it expands the choices available to developing countries. Borrowers are no longer dependent on a single group of institutions. Competition among development banks can improve financing terms and encourage greater responsiveness to local needs.
Second, the NDB has introduced a more balanced governance model. Equal representation among the founding members challenges the principle that economic power must automatically translate into institutional dominance.
Third, the bank has helped normalise infrastructure financing in local currencies. Even limited local-currency lending can build expertise, develop bond markets and reduce exchange-rate risks over time.
Fourth, the NDB can support climate adaptation and sustainable development. Developing countries often struggle to access climate finance because existing mechanisms are slow, conditional or insufficiently responsive to local priorities.
Finally, the NDB has symbolic importance. Institutions shape political imagination. The existence of a Global South development bank demonstrates that the international financial order is not permanently fixed.
Its success should therefore be measured not only by whether it replaces the World Bank, but also by whether it improves the bargaining position of developing countries.
The Way Forward
BRICS should avoid exaggerated claims of having already created a new financial order. A realistic strategy would focus on building a parallel and more pluralistic system gradually.
Strengthen local-currency financing
The NDB should expand lending in the currencies of borrowing countries. This requires deeper local bond markets, reliable currency-conversion mechanisms and suitable hedging instruments.
Build independent payment infrastructure
BRICS should develop payment systems that are interoperable, secure and transparent. The objective should not necessarily be to immediately replace SWIFT, but to ensure that financial connectivity is not controlled by a single geopolitical centre.
Establish credible credit-rating capacity
A BRICS-based rating system could provide an additional assessment of development projects and sovereign borrowers. It must, however, maintain professional independence. A rating agency perceived as politically controlled would not attract investors.
Make the CRA functional
The CRA needs permanent staff, independent surveillance, a research wing and faster disbursement procedures. The IMF-linked requirement for substantial withdrawals should be reconsidered if the CRA is to become a true alternative safety net.
Increase capitalisation
The NDB must expand its capital base and mobilise private investment without compromising developmental objectives. Cooperation with regional development banks can help increase its reach.
Pursue gradual de-dollarisation
A sudden attack on the dollar is neither practical nor desirable. BRICS should instead promote diversification through local-currency trade, currency swaps, alternative reserve assets and regional financial cooperation.
Improve internal coordination
BRICS needs clear rules for decision-making, dispute settlement and financial transparency. Expansion should not come at the expense of institutional coherence.
India’s Role
India occupies a distinctive position in the BRICS debate. It supports a multipolar world and greater representation for developing countries, but it does not favour a bloc-based confrontation with the West.
This approach is strategically sensible. India benefits from cooperation with BRICS in areas such as development finance, local-currency settlements, energy security, technology and reform of global institutions. At the same time, India has deep trade, technological and strategic relations with the United States, Europe and other advanced economies.
India should therefore promote a practical agenda rather than an ideological one. Its priorities could include:
- Strengthening the NDB’s development-financing capacity.
- Promoting rupee-denominated borrowing where feasible.
- Improving coordination among regional development institutions.
- Developing secure and interoperable payment systems.
- Supporting reform of IMF and World Bank governance.
- Encouraging cooperation in climate finance, digital public infrastructure and resilient supply chains.
India should also ensure that BRICS does not become dominated by a single power. A successful grouping must remain inclusive, transparent and responsive to the interests of smaller developing countries.
Conclusion
The BRICS bank was born from a legitimate dissatisfaction with the unequal and dollar-dominated global financial order. The New Development Bank has made meaningful contributions to infrastructure and sustainable development, while the Contingent Reserve Arrangement has symbolised the desire for greater financial autonomy.
But the institutional record reveals a sharp gap between aspiration and capability. The NDB remains dependent on dollar funding, Western credit-rating agencies and international capital markets. Its financial scale is still modest. The CRA has never been activated and remains tied to IMF-linked conditions. De-dollarisation has been slowed by divergent interests, domestic vulnerabilities and the absence of a fully developed alternative system.
The BRICS project has therefore not replaced the Bretton Woods order. Nor has it created a fully independent financial architecture. Its more realistic achievement has been to introduce an additional institutional layer within the existing system and to strengthen the negotiating voice of the Global South.
The alternative did not disappear; it remained incomplete. The NDB is best understood not as a rival that has defeated the World Bank, but as an emerging instrument of financial pluralism. Its future will depend on whether BRICS members are willing to bear the costs of autonomy—greater coordination, deeper capital commitments, stronger institutions and reduced dependence on established Western markets.
Until then, BRICS will remain less an alternative to the global financial order than a platform for seeking a more equitable position within it.
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Conclusion
The BRICS bank was born from a legitimate dissatisfaction with the unequal and dollar-dominated global financial order. The New Development Bank has made meaningful contributions to infrastructure and sustainable development, while the Contingent Reserve Arrangement has symbolised the desire for greater financial autonomy.
But the institutional record reveals a sharp gap between aspiration and capability. The NDB remains dependent on dollar funding, Western credit-rating agencies and international capital markets. Its financial scale is still modest. The CRA has never been activated and remains tied to IMF-linked conditions. De-dollarisation has been slowed by divergent interests, domestic vulnerabilities and the absence of a fully developed alternative system.
The BRICS project has therefore not replaced the Bretton Woods order. Nor has it created a fully independent financial architecture. Its more realistic achievement has been to introduce an additional institutional layer within the existing system and to strengthen the negotiating voice of the Global South.
The alternative did not disappear; it remained incomplete. The NDB is best understood not as a rival that has defeated the World Bank, but as an emerging instrument of financial pluralism. Its future will depend on whether BRICS members are willing to bear the costs of autonomy—greater coordination, deeper capital commitments, stronger institutions and reduced dependence on established Western markets.
Until then, BRICS will remain less an alternative to the global financial order than a platform for seeking a more equitable position within it.
