The World Bank’s executive board has approved Ajay Banga as its next president, with the India-born American businessman set to lead the institution’s efforts to expand lending capacity and fight climate change. Nominated by President Biden, Banga will serve a five-year term starting June 2, succeeding David Malpass.
His ancestors are from the Punjabi city of Jalandhar. His father, retired lieutenant general Harbhajan Singh Banga, served in the Indian Army.
Banga attended the Hyderabad Public School in Hyderabad as well as St. Edward’s School in Shimla for his education. Afterwards, he earned an Economics Bachelor of Arts (Honors) from St. Stephen’s College in Delhi, followed by an MBA-equivalent PGP in management from the Indian Institute of Management in Ahmedabad.
The 63-year-old former Mastercard CEO has also held leadership positions at Citigroup and PepsiCo, and spent much of his early career in India. Banga joins the World Bank as it attempts to balance competing priorities, with wealthy nations pushing for more lending to combat climate change without contributing additional funds.
President Biden praised Banga as a transformative leader who will bring together public and private sectors, as well as philanthropies, to revolutionize development finance. However, many developing nations are cautious about the climate effort, fearing it may reduce resources for poverty alleviation and economic development programs.
Banga supports the World Bank taking on more risk and leveraging existing assets to raise funds but emphasizes the need to engage the private sector in funding clean energy projects globally. He has proposed that the World Bank provide insurance coverage for private investments in early-stage clean energy projects, withdrawing once they stabilize.
Although the U.S. traditionally nominates U.S. citizens as World Bank presidents, drawing criticism from developing nations, Banga ran uncontested for the role. Russia abstained from voting, breaking the tradition of unanimous board support for a new president, but the senior U.S. official said that Banga’s support from the 25-member board was “very strong.”
The World Bank’s overhaul is expected to be a significant topic at multilateral events this year, including the G20 leaders’ summit in September, the bank’s October meetings, and the COP 28 climate change conference in December.