Biden nominates Ajay Banga, former Mastercard chief and IIM-A grad, to head World Bank

In a surprise move, US President Joe Biden on Thursday nominated Indian-American business executive Ajay Banga to become president of the World Bank, lauding his experience forging public-private partnerships to address financial inclusion and climate change.

Banga graduated with a Bachelor of Arts (Honours) degree in Economics from St. Stephen's College, Delhi University followed by PGP in Management from the Indian Institute of Management, Ahmedabad. Banga was born on November 10, 1959 in Khadki cantonment of Pune. The Government of India awarded Banga the civilian honour of the Padma Shri in 2016.

The World Bank on Wednesday said it expects to select a new president by early May to replace David Malpass, who announced his resignation last week. Banga's nomination by the United States all but assures he will assume a job that oversees billions of dollars of funding as the institution embarks on a major series of reforms to better respond to climate change and other pressing challenges facing developing countries.

Other names that did the rounds for the prestigious position are Samantha Power, who leads the U.S. Agency for International Development and served as U.S. ambassador to the United Nations under President Barack Obama, Rajiv Shah, former USAID administrator under Obama who now heads the Rockefeller Foundation, a philanthropic group, and Ngozi Okonjo-Iweala, the current head of the World Trade Organization, a dual Nigeria-US citizen.

“Ajay is uniquely equipped to lead the World Bank at this critical moment in history," Biden said in a statement. "He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change."

Biden also singled out Banga's experience mobilising public-private resources to tackle urgent challenges such as climate change at a range of organisations.

Malpass said he will step down by early June, well before his term ends in April 2024. Malpass' exit comes months after calls grew for him to step down after he declined to acknowledge the scientific consensus that fossil fuels were warming the planet.

Malpass faced criticism from climate activists in September after he refused to confirm during a climate panel whether he accepted the scientific consensus that burning fossil fuels were dangerously warming the planet, reported CNN.

The World Bank, a group of 187 nations, lends money to developing countries to help reduce poverty. Former US President Donald Trump appointed Malpass as World Bank chief in 2019 for a five-year period.

The bank has historically been headed by someone from the United States, its largest shareholder, while a European heads the International Monetary Fund (IMF), but developing countries and emerging markets have pushed to widen those choices.

"Banga has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity,” Biden said.

Banga's nomination is the first to be made public, but the bank will accept nominations from other member countries through March 29. Germany, another major shareholder, this week said the job should go to a woman since the bank has never been headed by a woman in its 77-year history.

Raised in India but now a U.S. citizen, Banga currently serves as vice chair of General Atlantic, a U.S. private equity firm. He retired in December 2021 after 12 years at the helm of Mastercard Inc, where he set a target of bringing 1 billion people and 50 million micro- and small businesses into the digital economy by 2025. He also held various positions at Citigroup Inc., including as CEO of the Asia-Pacific region. 

He also serves as co-chair of the Partnership for Central America, where he worked closely with U.S. Vice President Kamala Harris to mobilize public, private and non-profit resources for Northern Central America.

US Treasury Secretary Janet Yellen said Banga's experience at Mastercard and his work to deploy private capital into climate solutions would help him achieve the World Bank’s dual objectives of eliminating extreme poverty and expanding shared prosperity. Banga’s nomination comes with Yellen in India for discussions among Group of 20 finance ministry and central bank leaders gathering this week in Bengaluru.

She said Banga understood that those objectives were deeply intertwined with addressing climate change, preparing for and preventing future pandemics, and mitigating the root causes and consequences of conflict and fragility.

"Mr. Banga’s track record of forging partnerships between the public sector, private sector, and non-profits uniquely equips him to help mobilise the private capital and press for the reforms needed to meet our shared ambitions," she said.

That would enable the World Bank to serve "as a force multiplier for good" by catalysing action from the wide range of players, she said, adding that the World Bank could not meet the massive needs on its own.

With inputs from Reuters