BEIJING: The new China-led Asian Infrastructure Investment Bank is considering giving senior staff more power over loan approval than at existing multilateral lenders to speed up the decision process, officials familiar with the talks said.
Under proposals to be discussed this week in Singapore, the board of directors, which represents member countries, would not sit at the lender’s headquarters. The threshold and conditions to delegate loan decisions to management have not yet been agreed, according to the officials from founder-member countries, who asked not to be named as the talks are not public.
China, which lined up support of 56 nations for the $100-billion bank, wants to set it apart from institutions such as the World Bank, which borrowers have criticized for having too many conditions and authorization layers.
“In the past there’s been a lot of complaints that the multilateral institutions－the board－can be heavy-handed in the operations, so there will be room for improvement,” Justin Yifu Lin, a former chief economist at the World Bank, said in an interview on Monday in Singapore.
“But at the same time, I think that to have some kind of supervision from the board would be desirable.”
The Beijing-based AIIB, which is recruiting Chinese and international staff, would be unusual in forgoing an on-site executive board, marking out a contrast with institutions such as the Asian Development Bank or the African Development Bank.
“Decisions could be made more efficiently without a board physically present,” said Lin, who is now a director of the China Center for Economic Research at Peking University.
Chief negotiators will meet in Singapore this week to discuss draft articles of agreement and the bank’s operational policies, the city-state’s finance ministry said in a statement on Tuesday.
The AIIB and the Finance Ministry did not immediately respond to faxed requests for comment on plans for the bank’s loan-approval process.
Under proposals being discussed, AIIB’s board would retain power to overturn lending decisions made by an investment committee of senior staff.
The Washington-based World Bank and other lenders have tried to streamline their decision process for small or low-risk loans, including with absence-of-objection procedures that do not require board discussion.
