An employee cleans a board during the preparations for the BRICS summit in Ufa, Russia, July 7, 2015. The BRICS emerging economies launched a development bank, New Development Bank, in Shanghai on Tuesday. [Photo / Agencies]

New Development Bank, a multinational financial institution backed by BRICS, was launched in Shanghai on Tuesday.

The bank, a joint initiative by Brazil, Russia, India, China and South Africa, will start operating at the end of the year or early 2016, said officials. The institution needs to finish preparatory work, including the organization's structure and rules, and the selection of the investment projects before it opens its doors.

China's Finance Minister Lou Jiwei said at the opening ceremony that "the NDB is complementary to the existing multilateral development organizations, and it will build close relationships with them and with the private sector."

"The bank will provide new driving force to accelerate the global economic recovery by supporting infrastructure projects and expanding global demand," added Lou.

"It will also complement the China-initiated Asian Infrastructure Investment Bank, and both will share operational experience and strengthen cooperation when the projects start," he added.

The NDB, proposed in 2012, will have an initial authorized capital of $100 billion, and its initial subscribed capital of $50 billion will be equally shared among the five founding members.

K.V Kamath, who headed India's private bank ICICI Bank for more than a decade, has been named as the first president of the NDB. Zhu Xian, vice-president of the World Bank, was picked by China as one of the four vice-presidents.

The bank's head officewill be based in Lujiazui, Shanghai's financial hub, while an African regional center will be set up in Johannesburg, South Africa.