Credit without trust: Russia is unhappy with the work of the BRICS Bank

Russia has expressed dissatisfaction with the working methods of the New BRICS Development Bank (NDB) in the face of sanctions. Moscow is not satisfied with some elements of the financial institution's business practices, Russian Deputy Foreign Minister Sergei Ryabkov told Izvestia. In 2022, the NDB officially announced the suspension of operations in Russia. At the same time, the diplomat stressed that the bank remains a strategically important partner. Experts are confident that other BRICS platforms need to consider protection against similar risks. For example, a Commodity Exchange project is currently under active development.

What claims does Russia have against the NBR

The New Development Bank (NDB) was created in 2014 by the BRICS countries as an alternative to the World Bank and the IMF. Russia has contributed $2 billion to the authorized capital and has an equal share in the management. Prior to the start of the CBR, the bank actively approved loans for the Russian Federation, but with the introduction of Western sanctions, it suspended operations in Russia. This came as a surprise to Moscow: the financial institution created with its participation to counter the economic pressure of the West, itself applied restrictions.

"We are not satisfied with some elements of the business practices that the New Development Bank adheres to, but the institute itself is very important and valuable, and it has deep fundamental experience, including in the Russian field," Russian Deputy Foreign Minister Sergei Ryabkov told Izvestia.

Due to problems with the NBR, a number of Russian initiatives have been frozen, for example, the largest infrastructure project worth $460 million for the digitalization of the judicial system of the Russian Federation. Modernization of sewage treatment plants and water utilities in Volga cities with a budget of $320 million has been suspended. The renovation of logistics hubs and the Russian civil fleet has been postponed indefinitely.

Perhaps, over time, other initiatives will be implemented together with the NBR: cooperation does not end solely on financing projects, Elena Melnikova, adviser to the Director of the Statistics Department of the Bank of Russia, noted in an interview with Izvestia.

"We just need to find a workable scheme that would allow us to ensure the normal implementation of such projects even in the current conditions of illegal sanctions pressure,— Sergei Ryabkov added.

To eliminate the risks of similar blockages in the future, it is necessary to create a sovereign digital settlement model, says Anastasia Gavrilova, an expert in international relations at the National Research University Higher School of Economics. The expert emphasized that if funds do not physically cross borders, then foreign countries lose the opportunity to block or arrest such transfers. It is worth taking a closer look at the development of the BRICS Pay payment system and integrating national digital currencies, including the ruble and the yuan.

The BRICS Commodity Exchange will help accelerate the launch of alternative payment mechanisms, experts say. Recently, the Ministry of Economic Development of the Russian Federation announced the readiness of its conceptual model — the work plan for it will be approved by July 1.

Economic sustainability in the face of sanctions pressure became a key topic at the meeting of national security advisers of the BRICS countries, which was held on June 23 in New Delhi with the participation of Sergei Shoigu.

Settlement power: BRICS to introduce independent payment systems

The initiatives will allow Russia to attract capital from the Global South and safely invest in their economies.

The BRICS Nuclear Platform

However, the situation with restrictions even encourages BRICS members to switch to direct settlement schemes faster. The freezing of bank loans through the NBR has not stopped the development of major joint projects and scientific programs within the framework of the association. For example, the BRICS nuclear energy platform is already developing mechanisms to prevent a repeat of the NBR story.

— One of the working groups of the BRICS Nuclear Platform deals with financial instruments. After the World Bank announced its support for nuclear energy projects, we saw that many financial institutions have become more open to financing nuclear projects. We don't have any specific plan yet, but we are cooperating with such institutions and exploring the possibilities of financing projects in the countries of the association," Elzy Pooley, chief coordinator of the BRICS Nuclear Platform, told Izvestia.

The main advantage of BRICS in the nuclear field remains full technological autonomy. In particular, Russia and China have full—cycle technologies, from uranium mining to waste disposal. Russia holds about 40% of the global uranium enrichment market, which is why even the United States depends on these supplies and does not impose an embargo.

But despite the development of independent instruments within the BRICS, so far everything is decided by bilateral agreements between the leaders, said Sergey Tolkachev, professor at the Financial University under the Government of the Russian Federation. An example is the Akkuyu NPP, which is being built on the basis of personal agreements between Vladimir Putin and Recep Tayyip Erdogan. Turkey defends the Rosatom project, as the plant will cover 10% of its energy needs. However, Ankara is balancing between Russia and the West. With strong pressure from NATO countries, Turkey could theoretically renegotiate the terms of the project.

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Will the NDB replace the IMF

Nevertheless, for the active development of all major BRICS projects, the financial structures of the association need to be brought to a new level or new ones created. The same NBR cannot become a full-fledged alternative to the IMF, Tolkachev noted. According to him, the volume of transactions is incomparably lower, and the degree of prevalence and reliability in international and national circles of this bank is much less. The IMF's loan potential is about $1 trillion. From 2018 to 2026, more than $60 billion was allocated to Argentina alone. And the total portfolio of the BRICS NBR has reached only $40 billion.

— In the form in which the NBR was created, it cannot function physically due to the threat of sanctions, and nothing can be done about it. In general, the decision-making system in BRICS has become more complicated due to the expansion of participants, so it will be more difficult to promote radically new projects there," added Vasily Kashin, a member of the BRICS Expert council.

Tolkachev stressed that there are no technical problems with the resumption of the NBR's work in the Russian Federation: the restrictions lie in the plane of politics and secondary sanctions. He calls the pragmatic position of China and India the main obstacle. Although these countries run the NBR on equal terms with Russia, their own businesses are critically dependent on the American and European markets.

By the end of 2025, China's trade turnover with the EU reached $828 billion, and with the United States — almost $560 billion. At the same time, the volume of trade with Russia, despite historical records, is several times less — about $228 billion. Beijing is not ready to risk large sales markets in order to support individual financial projects. And Indian business has historically been heavily dependent on the American IT market and Western investments. New Delhi takes an emphatically neutral position: it willingly buys Russian oil at a discount, but refuses to compromise its key banks and state funds.

As a result, BRICS needs to adjust the architecture of cooperation. For Moscow, the situation with the NDB has closed the illusions about a quick replacement of the IMF and confirmed that its own technological leadership, rather than collective funds, remains the main shield. Now, the effectiveness of the association depends on whether the countries manage to launch sovereign digital settlements and protect key projects with bilateral guarantees from the leaders.