World Bank board elects US nominee Ajay Banga as president

The World Bank's board of governors on May 3 elected former Mastercard CEO Ajay Banga to a five-year term as president, the bank said, ushering in an Indian-born finance and development expert charged with revamping the lender to tackle climate change and other global crises.

Banga, 63, was nominated for the post by US President Joe Biden in late February and was the sole contender to replace departing World Bank chief David Malpass, an economist and former US Treasury official who served in the Trump administration. He starts the new job on June 2, Reuters reports.

The election came after World Bank board members interviewed Banga for four hours on May 1. Malpass's last day at the bank will be June 1. The decision came in a vote by 24 of the board's members, with Russia abstaining, instead of the usual consensus-based process, a source familiar with the process said.

Biden congratulated Banga on his "resounding approval" to run the World Bank, which he described as "one of humanity’s most critical institutions to reduce poverty and expand prosperity around the globe."

"Ajay Banga will be a transformative leader, bringing expertise, experience, and innovation to the position of World Bank President," Biden said. "He will help steer the institution as it evolves and expands to address global challenges that directly affect its core mission of poverty reduction — including climate change."

Treasury Secretary Janet Yellen said Banga brought the "right leadership and management skills" to the job, and would play a critical role in pushing forward with additional reforms, including by forging partnerships between the public and private sectors and nonprofit groups.

"Ajay understands that the challenges we face – from combatting climate change, pandemics, and fragility to eliminating extreme poverty and promoting shared prosperity – are deeply intertwined. He has effectively built a broad global coalition around his vision for the Bank over the course of his candidacy," Yellen said in a statement.

One source familiar with the selection process said board members saw Banga as a "true change maker" who will help accelerate reforms at the global development bank. It already loans out hundreds of billions of dollars to developing countries but is working to increase its lending to help them address global challenges such as climate change.

"The Board looks forward to working with Mr. Banga on the World Bank Group Evolution process, as discussed at the April 2023 Spring Meetings, and on all the World Bank Group’s ambitions and efforts aimed at tackling the toughest development challenges facing developing countries," the bank said.

Biden announced Banga's candidacy during Yellen’s participation in meetings with Group of 20 finance officials in Bengalaru, India, a source familiar with the process said.

Once it became public, she and her top traveling aides immediately began selling their counterparts on Banga’s candidacy, the source said.

The World Bank has been led by an American since its founding at the end of World War Two, while the International Monetary Fund has been led by a European.

Banga, who was born in India and spent his early career there, has been a US citizen since 2007.

Banga has met with officials from 96 governments since his nomination, the source said. He visited eight countries during a three-week world tour to meet with government officials, business leaders and civil society groups, flying a total of 39,546 miles (63,643 km).