Initial capital of $50bn has been earmarked for NDB which is expected to be expanded to $100bn within a period of next two years.
The new bank will get $41bn from China, while Brazil, India and Russia will each grant $18bn. A $5bn grant would be offered by South Africa.
NDB, which is also known as the BRICS bank, will fund infrastructure and development projects in BRICS countries including Brazil, Russia, India, China and South Africa.
Initially, the launch was proposed in 2012, but due to prolonged negotiations over the bank’s funding, management and headquarters it got delayed.
NDB president Kundapur Vaman Kamath told Reuters: "Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way."
Kamath added saying that the bank will partner with the China-led Asian Investment Infrastructure Bank (AIIB).
Said to be seen as an alternative to the World Bank and the International Monetary Fund, the NDB will lend money to developing countries in a bid to support finance infrastructure projects.
NDB is operated by the BRICS states and has been established to foster financial and development cooperation among the five emerging markets.
