Credit Lines Pact Signed by Five Banks of BRICS Nations (Download PDF)

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BRICS Inter bank Cooperation Mechanism (ICM) Banks agreed to establish and cooperate on local currency credit lines. Allows five banks to extend credit lines in local currencies to BRICS ICM members and BRICS companies against guarantees of signatory banks.

Image of Overview of BRICS Financial Cooperation

Image of Overview of BRICS Financial Cooperation

Image of Overview of BRICS Financial Cooperation

These Five Banks Are:

  • Brazilian Development Bank

  • Russia’s Vnesheconombank

  • Export-Import Bank of India (EXIM)

  • China Development Bank

  • Development Bank of South Africa.

What Does this Mean?

The agreement:

  • Typically, the credit can only be extended to local within-the-country agencies.

  • Using local currencies in credit promotes economic cooperation, increase trade, mitigates currency risks, and facilitates companies in accessing BRICS markets.

  • Credit sharing also allows ICM members to share information on internal credit ratings of clients, share internal assignment methodologies, and rating assessment.

What is BRICS Interbank Cooperation Mechanism (ICM)?

BRICS (Brazil, Russia, India, China, and South Africa) nations established BRICS ICM with following purpose:

  • Enhance trade and economic relations amongst BRICS countries

  • Develop and strengthen economic ties and investment cooperation between BRICS countries

  • Provide financing and banking services for future investment projects that could be beneficial for the economic development of the BRICS countries.

  • Participants are:

    • Brazilian Development Bank (BNDES)

    • State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) (Russian Federation)

    • Export-Import Bank of India

    • China Development Bank Corporation

    • Development Bank of Southern Africa (DBSA)

Within the framework of the BRICS interbank cooperation mechanism, the member banks are developing multilateral financial cooperation within the BRICS countries for settling payments and financing investment projects in local currencies.

- Published/Last Modified on: September 17, 2017

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