Chinese Finance Minister Lou Jiwei, centre, Shanghai Mayor Yang Xiong, right, and President of the New Development Bank Kundapur Vaman Kamath attend the launch ceremony of the New Development Bank in Shanghai on July 21, 2015. [Photo: Xinhua]

The New Development Bank, backed by the five BRICS countries, has officially opened in Shanghai.

As CRI's Niu Honglin reports, the main purpose of the bank is to finance infrastructure projects in developing countries.

The opening comes after a BRICS summit held in the Russian city of Ufa earlier this month, where leaders from Brazil, Russia, India, China and South Africa talked about some final details of the multilateral lender.

Chinese Finance Minister Lou Jiwei says the bank will gradually open up to include more developing nations and supplement the existing international financial system.

"As a multilateral development bank initiated and established by the emerging markets, the NDB will focus more on the needs of developing countries, respect their national conditions and better represent developing countries' ideas."

The BRICS Bank headquartered in Shanghai has a capital base of 50 billion US dollars and the number is expected to be doubled in the coming years.

The money will be mainly used to cope with increasing demand of new infrastructure in developing countries and emerging economies, which sometimes have difficulties securing financing from other international lenders that are controlled by the world's developed economies.

The NDB will also work closely with the Beijing based Asian Infrastructure Investment Bank, which has a similar mandate.

The bank's new president K.V. Kamath, a former executive with one of the largest private banks in India, says the BRICS bank has decided to set up a "hotline" with the AIIB to strengthen cooperation between the two lenders.

"We have decided to set up a hotline between ourselves so that we can talk to each other to make sure that we have a common mind and a common approach because we believe that new institutions coming together with a completely different approach, will truly lead to the development of not only the "BRICS" countries, but in a longer run, the entire development world."

The BRICS countries have also agreed to set up a 100-billion Dollar reserve fund to help members in the event of a liquidity crunch.

China has pledged 41 billion US Dollars to this fund, giving it the largest share of voting rights at 39.5 percent.

Brazil, India and Russia will each contribute 18 billion US Dollars, while South Africa has promised 5 billion dollars.

The BRICS nations represent 42 percent of the world's population and account for over 30 percent of the world's GDP.