NEW DELHI, November 18: The government on Wednesday approved a proposal for the ratification and submitting of the Articles of Agreement of the Asian Infrastructure Investment Bank.
"The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval for the ratification and submitting of the Articles of Agreement (AoA) of the Asian Infrastructure Investment Bank (AIIB)," an official release said.
It is expected that with membership in AIIB, India would be able to raise and obtain more resources for much needed infrastructure development, it added.
Earlier this month, China had ratified the Asian Infrastructure Investment Bank (AIIB) agreement, that will set out legal framework for the $100 billion-bank of which India and 56 other countries are founder members.
The multilateral development institution is tasked with financing infrastructure construction across Asia.
The Beijing-based bank could rival World Bank, International Monetary Fund and Asian Development Bank in scaling up funding for the infrastructure projects in Asia.
With authorised capital of $100 billion and subscribed capital of $50 billion, AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare.
China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent, 6.66 percent stake respectively in the newly-formed bank.
China has already nominated its former Finance Minister Jin Liqun as the first President of AIIB.
"India stands to become the second largest shareholder of AIIB after China. This is a historic opportunity for India to play a prominent role in the governance of a multilateral institution," it said.
In India, infrastructure financing has traditionally been done through government and the existing multi-lateral development banks.
These have been supplemented by public sector contributions through public-private partnership projects.
However, in the context of fiscal consolidation and risk-averse private sector, AIIB will make additional resources available.
Also, this is expected to recycle the savings accumulated in emerging countries.