Ajay Banga has made history by becoming the World Bank’s first Indian-born president. US President Biden nominated him for the position more than two months ago, and the World Bank’s board of executive directors chose him for a five-year term on May 3, 2023. The bank expects that his financial and development knowledge can aid in reorganising the institution to deal with global challenges, particularly in emerging countries. The World Bank stated that Banga will become the 14th president of the bank on June 2, 2023.
David Malpass, who encountered controversy for his opinions on climate change, is stepping down as World Bank President ahead of schedule, and Ajay Banga was voted unopposed as his replacement. Despite being the first Indian-American to hold this post, Banga’s childhood is hardly known. He was born in Jalandhar, India, and began his career here before becoming a citizen of the United States in 2007. Harbhajan Singh Banga, Banga’s father, was a former lieutenant general in the Indian Army, and Jaswant Banga was his mother. He is married to Ritu Banga, and they have two kids, Aditi and Jojo.
After graduating from Hyderabad Public School, Ajay Banga got a Bachelor of Arts degree (Honours) in Economics from St. Stephen’s College, a prestigious Delhi University campus. He then went on to finish his postgraduate studies at IIM Ahmedabad. Banga had a distinguished career, having served as Mastercard’s CEO and President from July 2010 until December 30, 2020. He left that post to become General Atlantic’s vice chairman. Banga spent nearly a decade in India working for well-known companies such as Citigroup and Nestlé before joining Mastercard.
Ajay Banga has held a variety of leadership positions in various organisations. From 2020 to 2022, he served as Honorary Chairman of the International Chamber of Commerce, and he co-chaired the Partnership for Central America, which intended to develop economic opportunities in disadvantaged regions in El Salvador, Guatemala, and Honduras. Banga was also a director of Kraft Foods, the American Red Cross, and Dow Inc.
Furthermore, Banga was instrumental in the introduction of PepsiCo’s worldwide restaurant chain in India. In 2016, the Indian government honoured him with the Padma Shri award for his achievements.
The World Bank has an electoral mechanism that was formed in 2011 as a result of a decision reached by its shareholders. This procedure incorporates an open, transparent, and merit-based candidature process in which any bank member country may submit a candidate through an Executive Director or Governor. According to the official press announcement, after being nominated, Ajay Banga underwent a thorough due diligence procedure and was interviewed by the Executive Directors.
The World Bank board members interviewed Banga for four hours on May 1, then held a vote of 24 board members to determine the ultimate selection. Russia, on the other hand, abstained from the vote, deviating from the usual consensus-based method.
David Malpass will leave his position on June 1, 2023, and Ajay Banga will take over as World Bank President on June 2, 2023. According to reports, Malpass received a net salary of $525,000 as of 2021, and his contract provides him with a pension equal to around 70% of his salary since April of this year. Ajay Banga is expected to get paid equally.
Banga’s appointment as the next World Bank President is enormously important, considering the present global scenario in which developing nations are facing an increasing debt crisis, and food and energy markets are being impacted by the ongoing Ukraine-Russia war. His principal task as President of the World Bank Group will be to guide the World Bank Organisation in addressing the most critical development challenges confronting low- and middle-income countries. This includes emphasising growth and development to address global concerns such as climate change, which have an influence on the bank’s basic goal of eliminating poverty.
Furthermore, Banga is intended to play a critical role in promoting further improvements by developing collaborations between governmental, commercial, and non-profit organisations. Banga will become World Bank President next month, as well as Chair of the Board of Executive Directors of the International Bank for Reconstruction and Development (IBRD) and ex-officio Chair of the Boards of Directors of the International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). He will also chair the Administrative Council of the International Centre for Settlement of Investment Disputes (ICSID).
After his appointment, Finance Minister Nirmala Sitharaman expressed confidence that Banga will use his corporate skills to decrease poverty and encourage shared prosperity in developing countries.