Why in news
- Union Finance Minister attended the 11th Annual Meeting of the Board of Governors of the Asian Infrastructure Investment Bank in Doha, Qatar.
Key terms
Board of Governors
The highest decision-making body of multilateral banks, comprising one governor appointed by each member nation.
Multilateral Development Bank
An international financial institution created by multiple countries to promote economic development via loans and grants.
Voting Share
The proportion of decision-making power a member country holds based on its financial contributions to an institution.
Non-concessional Loan
A loan extended at market-based interest rates rather than subsidized or grant terms.
What is the AIIB?
- A multilateral development bank established by an international treaty in 2015 and operationalized in January 2016.
- Headquartered in Beijing, China, it focuses on financing sustainable infrastructure, cross-border connectivity, and productive sectors in Asia and beyond.
Governance and Capital Structure
- Voting power is based on capital share subscriptions, where China holds the largest voting share followed by India and Russia.
- India is the second-largest shareholder in the bank and historically its largest cumulative borrower for infrastructure projects.
Why it matters
- Serves as a crucial source of non-concessional long-term financing for major transport, energy, and urban development projects across India.
Prelims facts
- AIIB is headquartered in Beijing and began operations in 2016.
- India holds the second-largest voting share in AIIB after China.
Mains discussion
- Role of non-Western multilateral funding bodies in bridging Asia's infrastructure financing deficit.
Source: PIB
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