Context: India is seeking as much as $6 billion of loans from multilateral institutions such as the Asian Development Bank,AIIB to bolster its efforts to fight the coronavirus outbreak.
Background

• India has already secured $1 billion funding from the World Bank to better its health sector for fighting against the coronavirus pandemic according to previous reports. The World Bank has approved a fast-track $1 billion “India COVID Emergency Response and Health Systems Preparedness Project” to help India prevent, detect, and respond to the pandemic and better its public health preparedness. It was the largest ever healthcare sector support from the World Bank.

About Asian Infrastructure Investment Bank (AIIB)

• It is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
• It is established by the AIIB Articles of Agreement (entered into force Dec. 25, 2015) which is a multilateral treaty. The Parties (57 founding members) to agreement comprise the Membership of the Bank.
• It is headquartered in Beijing and began its operations in January 2016.
• The members to Bank have now grown to 97 approved members worldwide.There are 27 prospective members including Armenia, Lebanon, Brazil, South Africa, Greece, etc.
• Fourteen of the G-20 nations are AIIB members including France, Germany, Italy and the United Kingdom.
• By investing in sustainable infrastructure and other productive sectors in Asia and beyond, it will better connect people, services and markets that over time will impact the lives of billions and build a better future.

Board of Governors

• The Board of Governors consists of one Governor and one Alternate Governor appointed by each member country.
• Governors and Alternate Governors serve at the pleasure of the appointing member. All the powers of the AIIB are vested in the Board of Governors.

Board of Directors:  Non-resident Board of Directors is responsible for the direction of the Bank’s general operations, exercising all powers delegated to it by the Board of Governors. This includes approving the Bank’s strategy, annual plan and budget; establishing policies; taking decisions concerning Bank operations; and supervising management and operation of the Bank and establishing an oversight mechanism.

International Advisory Panel (IAP)

• The Bank has established an IAP to support the President and Senior Management on the Bank’s strategies and policies as well as on general operational issues.
• The President selects and appoints members of the IAP to an initial two-year term, which can be renewed upon completion.
• The Panel meets at least twice a year, once in tandem with the Bank’s Annual Meeting, and second time at the Bank’s Headquarters in Beijing.
• Panelists receive a small honorarium and do not receive a salary. The Bank pays the reasonable costs associated with Panel meetings.

Membership

• Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.
• Regional members are those located within areas classified as Asia and Oceania by the United Nations.
• Unlike other MDBs (multilateral development bank), the AIIB allows for non-sovereign entities to apply for AIIB membership, assuming their home country is a member.
• Thus, sovereign wealth funds (such as the China Investment Corporation) or state-owned enterprises of member countries could potentially join the Bank.

Voting Rights

• China is the largest shareholder with 26.61 % voting shares in the bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
• The regional members hold 75% of the total voting power in the Bank.

The AIIB has a governance structure similar to other MDBs (multilateral development bank), with two key differences:

• it does not have a resident board of executive directors that represents member countries' interests on a day-to-day basis; and
• the AIIB gives more decision making authority to regional countries and the largest shareholder, China.

About AIIB Lending

• The recipients of AIIB financing may include member countries (or agencies and entities or enterprises in member territories), as well as international or regional agencies concerned with the economic development of the Asia-Pacific region.

The AIIB has signed a co-financing framework agreement with the World Bank and three nonbinding Memoranda of Understanding (MOU) with:

• the Asian Development Bank (ADB),
• European Bank for Reconstruction and Development (EBRD)

Significance of AIIB
The United Nations has addressed the launch of AIIB as having potential for “scaling up financing for sustainable development” for the concern of global economic governance. The capital of the bank is $100 billion, equivalent to ?2⁄3 of the capital of the Asian Development Bank and about half that of the World Bank.