RIO DE JANEIRO, June 8 (Xinhua) — The Brazilian Senate has approved the creation of the BRICS Bank and confirmed a treaty on creating a contingency fund for the bloc, local media reported on Monday.

The BRICS Bank, whose creation was announced during last year’s BRICS Summit, intends to be a bank to finance infrastructure development not only in the member countries — Brazil, Russia, India, China and South Africa — but also in many other developing nations. The creation of the bank needs parliamentary approval by all the member countries.

According to the agreement signed last year, the headquarters of the BRICS Bank will be located in Shanghai, and its first president will be from India. The initial capital will be 50 billion U.S. dollars.

At the same meeting, BRICS leaders also announced the establishment of the BRICS Contingent Reserve Arrangement, a 100-billion-dollar fund from which the BRICS member countries will be allowed to draw funds when going through a crisis. The Brazilian Senate also approved the creation of the fund.

Out of the 100 billion dollars, China will make the largest contribution of 41 billion dollars. Brazil, Russia and India will each contribute 18 billion dollars, and South Africa 5 billion dollars.

The fund is important to serve as a cushioning against crises, Brazilian Senator Delcidio Amaral, from the government’s Workers’ Party, said. The Brazilian government’s position is that the BRICS Bank and the contingency fund will serve to boost Brazil’s presence and importance in the world.