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.