New Delhi: Asian Development Bank (ADB) will need to step up capital expansion measures, including hybrid and callable capital, to ensure that exposure limits do not constrain development financing for larger developing member countries such as India, which may approach their borrowing ceilings in the coming years, MoS Finance Pankaj Chaudhary said on Monday.
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In his address at the ADB Annual Meetings in Samarkand, Uzbekistan, Chaudhary also said that the multilateral funding institution should adopt a "more transformational approach" to support sustainable and resilient regional development amid the current geopolitical challenges.
He said the current geopolitical environment presents multiple interconnected challenges, including those related to energy, food, debt, supply chains, and fiscal balance.
"These pressures underline the need for stronger and more coordinated responses. In this context, it is important that ADB moves beyond incremental approaches and adopts a more transformational approach to support sustainable and resilient regional development," Chaudhary said.
He said even in this backdrop, India has continued to demonstrate resilience, supported by strong fundamentals and sustained reforms. At the same time, development needs remain large and require access to predictable, long-tenor, and affordable development finance, particularly for investments in infrastructure, climate transition, and human capital.
"Going forward, ADB will need to develop strategies that address the evolving needs of larger developing member countries (DMCs) such as India, which may approach their exposure limits in the coming years.
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"It is therefore important that capital expansion measures, such as hybrid and callable capital, continue so that exposure limits do not constrain the development financing or borrowing programs of DMCs," Chaudhary said.
He further said that ADB's engagement with DMCs will need to be further strengthened and scaled up to support a more connected and prosperous region.
Chaudhary also called for "meaningful reforms" like enhanced risk appetite, better use of balance sheets, and stronger engagement with the private sector in multilateral development banks.
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