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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Institutions

Which statement about the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) is correct from the standpoint of an Indian company seeking foreign institutional funding?

The AIIB and the New Development Bank are multilateral development banks financing infrastructure and sustainable development, and India belongs to both. They lend to projects including in India, rather than operating only as equity funds or restricting lending to private firms or central banks.

  1. ABoth are exclusively equity funds and cannot lend to infrastructure projects
  2. BBoth are multilateral development banks that finance infrastructure and sustainable development projects, and India is a member of eachCorrect
  3. CAIIB lends only to private companies, while NDB lends only to the BRICS central banks
  4. DNeither can finance projects in India because India is a borrower of IMF only

Explanation

AIIB and NDB are multilateral development banks that lend for infrastructure and sustainable development, and India is a member of both. They are not equity-only funds and do not restrict lending as described in the other options. The IMF is not a project lender, so the last option is also wrong.

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