Indian American businessman Ajay Banga is the new president of the World Bank

The World Bank has elected former Mastercard CEO Ajay Banga to a five-year term as president.

Indian American businessman Ajay Banga is the new president of the World Bank

Washington Reuters

The World Bank board of governors elected Ajay Banaga, former CEO of Mastercard, to a 5-year term as its president on Wednesday. This brings in a finance and development expert from India to help the bank tackle climate change and global crises.

Banga, who is 63 years old, was nominated by US President Joe Biden for the position in late February. He was the only candidate to replace David Malpass (a former US Treasury official and economist) as the departing World Bank Chief. He begins his new job on 2 June.

Banga was interviewed by World Bank board members for four hours on the Monday before the election. Malpass will leave the bank on June 1. A source familiar with this process revealed that the decision was made by 24 board members in a vote, while Russia abstained, rather than the usual consensus process.

Biden congratulated Banga for his'resounding' approval to lead the World Bank. He described it as 'one the most important institutions of the human race to reduce poverty and increase prosperity across the globe'.

Biden stated that Ajay Banga would be a transformational leader who will bring expertise, experience and innovation to his position as World Bank president. He will guide the World Bank as it expands and evolves in order to tackle global challenges, including climate change.

Treasury Secretary Janet Yellen stated that Banga had the 'right management and leadership skills' for the job and would play a crucial role in pushing ahead with additional reforms. This includes forming partnerships between nonprofits and the public sector.

Ajay knows that our challenges - such as climate change, pandemics and fragility, to eradicating extreme poverty and promoting prosperity - are interconnected. Over the course of his campaign, he has built a global coalition that is united around his vision for Bank.

Critical Moment

Katie Malouf Bous, interim head at Oxfam International Washington, said that the bank must undergo a'serious' reform to close the gap between the rich and the poor. This would require new investments from the public sector and the 'guardrails' that have been placed around the private finance which has been running wild for far too long.

A senior US official stated that the election of Banga took place at a crucial moment, marked by the emerging debt distress among lower- and mid-income countries as well as ongoing problems on food and energy markets due to Russia's conflict in Ukraine.

The official stated that 'it is a challenging time, but one where the World Bank is more important than ever and the evolution of the World Bank has become absolutely crucial'.

The bank has already lent hundreds of billions to developing nations, but it is now working to increase the amount of money they lend to them to address global challenges like climate change and conflict as well as prepare for future pandemics.

The bank stated that 'the Board looks forward working with Mr. Banga to develop the World Bank Group evolution process... and on all of the World Bank Group’s ambitions, efforts, and initiatives aimed at tackling some of the most difficult development challenges faced by developing countries'.

Since its founding in 1945, the World Bank is led by an American. The International Monetary Fund is led by a European.

Banga is a US citizen who was born and raised in India. He spent most of his career there.

Source: Since his nomination, Banga has met officials from 96 countries. During a three-week tour of the world, he visited eight countries to meet with officials from government, business leaders, and civil society organizations, covering a total distance of 39,546 km (63,643 miles).