Last week – on July 21, to be precise – the New Development Bank (NDB) formally came into existence in Shanghai, China. Created by the countries of the Brics (Brazil, Russia, India, China and South Africa) alignment – alliance or bloc would be too strong a word to describe the association – it is, inevitably, popularly known as the Brics bank. Its starting capital is $50-billion, which will be made up of equal contributions from the five founder member States. It is hoped that this will be increased to $100-billion in the future. (This must not be confused with the $100-billion reserve fund also created by the Brics countries, to protect themselves from short-term liquidity problems.)

The new bank’s first president is India’s Kundapur Vaman Kamath, who, as CEO and MD of ICICI Bank from 2002 to 2009, transformed that institution into India’s largest private lender and won “Forbes Asia Businessman of the Year Award” in 2007. He has previous experience with development banks, having worked for the Asian Development Bank in Manila for six years.

Kamath expects the NDB to start operations late this year or early next year. “Our objective is not to challenge the existing [global development financing] system as it is but to improve and complement the system in our own way,” he said. “We will have an open mind in terms of the instruments we will use for funding projects. Should we approach the financial markets in [the] five Brics countries to raise local-currency funds so that in a way we break the challenge and the cost of dealing in hard currencies where the exchange rate continues to impact on you for a long, long time? Could we start by making substantially large bond issuance in the domestic market?”

No one, I think, should make the error of thinking that the NDB will necessarily be less strict than the World Bank, for example. “The operations of the bank shall be conducted in accordance with sound banking principles,” states Article 2 of the agreement that created it.

The focus of the Brics bank will be on infrastructure. “NDB’s support for infrastructure construction will effectively ease the bottleneck that has constrained emerging and developing countries nations for long and will offer support for their economies’ upgrade and growth,” noted Chinese Finance Minister Lou Jiwei at the opening of the bank. “[The] NDB is a new member and partner to the global development system.” And the World Bank has welcomed the arrival of the new institution. “We are committed to working closely with the NDB and other multilateral institutions, offering to share our knowledge and to cofinance infrastructure projects,” assured World Bank president Jim Yong Kim. “These types of partnerships will be essential to reach our common goals to end extreme poverty by 2030, boost shared prosperity and to reduce inequalities.”

All in all, it is great news. And it is important, too. Yet, why did it seem – at least to me – to get such a low key response? There are several answers. Since the NDB was first conceived, just three years ago, the world has become a much darker place. Conflict has flared in eastern Europe, the Middle East and Africa; tensions have risen in the South China Sea, and, of course, there is the apparently endless euro crisis. Also, the opening of the NDB came only a week after the announcement of the deal on the future of Iran’s nuclear programme, which, whether you think it is good news or bad news or a mixture of both, is indisputably very big news indeed.

Further, that brief period has also seen the shine go off the Brics group itself. Once an association of dynamic, fast growing economies, playing a key role in getting the global economy back on track, today the group’s acronym should be rendered brICs. Brazil is engulfed in a huge political and economic crisis. The country’s economy is expected to contract by at least 1.1% this year and grow by no more than 1% next year. Russia, hit by Western sanctions over the Crimea and Ukraine, is also expected to see its economy contract this year – perhaps by as much as 3.5%! Again, it may grow by about 1% next year, but, again, it may not. South Africa will at least grow this year, but only by about 2%, which is decidedly poor for an emerging economy. China has slowed down – and we had the recent scare about the falls on the Shanghai and Shenzhen stock exchanges, which forced the government and regulators to intervene. The country is still enjoying good growth, predicted to come to 7% this year, but this is also going to be the country’s slowest growth rate in 25 years. Only India is still sparkling, hitting 7.5% growth in the 2014/15 financial year and aiming for 8.5% this financial year.

Finally, perhaps ironically, the NDB has also been overshadowed by another new development bank – conceived of and launched by Brics member China. This is, of course, the Beijing-based Asia Infrastructure Investment Bank (AIIB). Formally launched by 50 countries on June 29, the AIIB’s initial authorised capital is $100-billion, twice that of the NDB. And it is a pretty safe bet that the AIIB’s authorised capital will grow over time. China will be the biggest shareholder in the AIIB, with 30%, while Asian countries together will hold about 75%, restricting partners from the rest of the world to 25%. The founder members included major Western economies France, Germany, Italy and the UK; South Korea; and Brics members Brazil, Russia and India. (South Africa has since joined the AIIB.) The AIIB has taken the mantle of the new, exciting, alternative international development funding agency off the NDB.

The AIIB has also created an asymmetry within Brics – the remit of the NDB covers the whole developing world, whereas the AIIB covers Asia. That means that China, India and (presumably) the Asian half of Russia can access both the AIIB and NDB, while Brazil, South Africa and European Russia can only access the NDB. Food for thought.