Who is he?
Kundapur Vaman (K.V.) Kamath is the newly appointed chief of the Shanghai-based New Development Bank (NDB), more commonly referred to as the BRICS Bank. Previously he was CEO of ICICI Bank, India’s largest private sector bank, for more than a decade and, more recently, chairman of its board of directors. He has also served as chairman of Infosys, India’s second-largest software exporter, and with the Asian Development Bank (ADB) from 1988-1996.
Why is he in the news?
In May, India announced its decision to appoint Kamath as the first president of the NDB for a five-year term starting this month. The appointment of one of the country’s top bankers is a reflection of the importance New Delhi is placing on the new institution.
The establishment of the NDB, which has both infrastructure-investment and crisis-lending functions, was announced last year by the five “BRICS” countries of Brazil, Russia, India, China, and South Africa. Conceived by some as a rival to the existing U.S.-led multilateral financial institutions, the BRICS leaders have formally described it as a “supplement” to the World Bank and other institutions.
Now that the bank is becoming a reality, its first president will have an important impact in determining whether the NDB evolves into a valuable supplement to the current order or a competitor. India won the right to appoint the first president after losing out to China on hosting the headquarters.
What can we expect from him?
Kamath’s diverse background in business and with the ADB put him in a strong position to help shape the role of the NDB, but he may be hard-pressed to handle the politics of the new institutions. The BRICS face a complex array of economic challenges (including, in the cases of Brazil and Russia, negative growth rates this year) even as they try to set up the new institution. Kamath has publicly committed to “ensur[ing] that there are some Indian projects in the infra[structure] space that can be taken up,” but will also face demands from other member states.
Two further areas to watch are how the NDB seeks to incorporate new members and how it balances being a standard-bearer for South-South cooperation and a credible borrower in international capital markets. Kamath has said that the NDB’s name was changed from the BRICS Bank “as new partner countries are likely to join” and members hence “opted for a larger canvas by expanding its scope of operations.” However, it is uncertain how these new members – including, potentially, Greece – will be chosen. Kamath has also noted that the NDB’s “policy mindset will be driven by all stakeholders and not just the lenders…an important aspect with regard to the speed of lending for projects.” How and to what extent this will allow the NDB to square with existing best practices and the need to identify and assess projects’ commercial viability remains to be seen.