The leaders of the five BRICS countries, Brazil, Russia, India, China and South Africa have signed a deal to create a new 100 billion dollars development bank and emergency reserve fund.

The capital for the bank will be split equally among the five participating countries. The bank will have a headquarters in Shanghai, China and the first president for the bank will come from India.

Brazil's President, Dilma Rousseff, announced the creation of the bank at a BRICS summit meeting in Fortaleza, Brazil yesterday. At first, the bank will start off with 50 billion dollars in initial capital.

The emergency reserve fund which was announced as a Contingency Reserve Arrangement will also have 100 billion dollars and will help developing nations avoid short term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.

The creation of the BRICS bank will almost surely create competition for both the World Bank and other similar regional funds.

BRICS nations have criticised the World Bank and the International Monetary Fund for not giving developing nations enough voting rights