In a major development that moves towards revamping of the global financial architecture, Asian Infrastructure Investment Bank (AIIB) formally opened for business today. Along with soon to be incorporated the New Development Bank of the Brazil-Russia-India-China-South Africa (BRICS) grouping, the AIIB is set to change the dominance of the west in infrastructure financing.

Chinese President Xi Jinping, in his inaugural address saw the launch of the AIIB as “a historical moment." "Asia's financing needs for basic infrastructure are absolutely enormous," Xi observed. He added that the bank would target investments in "high-quality, low-cost" projects.

The AIIB is expected to open a new channel of funding for the global south, which was so far dependent on the western backed International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB), in which Japan plays a pre-eminent role. The AIIB is likely to lend anywhere between $10 billion-$15 billion a year during the first five or six years.

An Indian delegation headed by Dinesh Sharma, additional Secretary in the Ministry of Finance attended the opening ceremony.

 In all 57 countries have joined as founding members while US and Japan stayed out.

Chinese Finance Minister Lou Jiwei was elected as the first Chairman of the AIIB council. China's former Finance Minister, Jin Liqun was elected the first AIIB president. Based on the share holding, India is expected to get the vice president post.

 With authorised capital of $ 100 billion and subscribed capital of $ 50 billion, Beijing-based 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 per cent, 8.52 per cent, 6.66 per cent stake respectively in the newly formed Bank. Their voting shares are calculated at 26.06 per cent, 7.5 per cent and 5.92 per cent.