Indian to head Shanghai-based BRICS bank

The new BRICS bank will be headquartered in Shanghai, China, with the presidency initially held by India, Brazilian President Dilma Rousseff said late on Tuesday.

The new BRICS bank will be called the New Development Bank - a name suggested by Prime Minister Narendra Modi.

The deal was reached after intense last-minute negotiations to settle a dispute between India and China over the headquarters of the new bank, which will have initial capital of $100 billion to invest in infrastructure projects.

The BRICS are looking to counter the Western dominance over global finances with the joint fund and bank, officials close to the talks said on Tuesday.

Negotiations over the headquarters and first presidency had hit an impasse hours before the BRICS countries' leaders were due to launch the $100-billion bank and a reserves fund of the same size at a summit in the coastal city of Fortaleza.

The impasse reflected the difficulties that Brazil, Russia, India, China and South Africa face in working together to build an alternative to Western-run multilateral institutions that have shaped world finances since the end of World War Two.

Negotiations stalled overnight on a dispute between China and India over who will host the bank, several officials said. China was proposing Shanghai and India New Delhi.

Failure to agree on the headquarters could have been an embarrassment for the BRICS, a group better known for its anti-Western rhetoric than agreement on concrete actions to reshape the world's financial architecture.

The disagreement behind closed doors between the world's most populous nations belied public expressions of cooperation between President Xi Jinping and Modi. "Judging from either bilateral, regional or global perspectives, China and India are long-lasting strategic and cooperative partners, rather than rivals," Xi said after meeting Modi, Chinese state news agency Xinhua reported.

Negotiations to create the bank dragged on for more than two years as Brazil and India fought China's attempts to get a bigger share in the lender than the others. The stark economic and political differences between the BRICS countries have made it difficult for the group to turn rhetoric into concrete action in coordinating policies.