Finance Minister P Chidambaram has urged the Asian Development Bank (ADB) to increase its annual lending capacity to $20 billion in the next ten years, in order to meet the development needs of the member-countries. Over the past three years, annual lending capacity of ADB under Ordinary Capital Resources (OCR) has been hovering around $10-11 billion.
Chidambaram highlighted that development needs of the members are quite large and growing; therefore the ADB should be sufficiently resourced to assist its members to address challenges like fighting poverty or developing infrastructure. He also requested the members to give this issue a serious consideration and quickly come to an agreement for increasing the annual lending capacity of ADB to $20 billion in the next 10 years.
Further, Finance Minister added that the Sustainable Level of Lending (SLL) should be increased by adopting a comprehensive strategy of augmenting income and reducing expenses. Stagnant or declining disbursements coupled with rising administrative expenses and are the main reasons behind sharp decline of SLL from $11 billion projected earlier. Actual administrative expenses have been growing at over 10 per cent per annum, while disbursements have averaged only around $6.5 billion. On increasing the SLL limit, Chidambaram said that fundamental solution for enhancing the SLL to a more meaningful level lies in increasing the capital stock of the bank and shareholders need to periodically contribute to the capital to help the bank discharge its responsibilities.