Who is Ajay Banga, the newly elected president of the World Bank and the first Indian-American to hold the position?

Everything you need to know about new World Bank Chief Ajay Banga

By Forbes India

Published: May 8, 2023 08:21:12 AM IST

Updated: Jul 25, 2023 05:01:40 PM IST

Ajay Banga has been elected unopposed to succeed David Malpass as president of the World Bank. Image: Tony Karumba / AFP

Indian-born Ajay Banga has made history by being voted the next president of the World Bank, after being nominated for the role by US President Biden more than two months ago. He will be the first Indian-born executive to hold the post in the history of the bank.

The World Bank's board of executive directors elected the former Mastercard CEO for a five-year term, bringing in a finance and development expert in the hopes of restructuring the organisation to address multiple global crises, especially in developing countries, according to a statement by the World Bank announcing his appointment. The announcement was made on May 3, 2023, confirming that Banga will assume the role on June 2, 2023. When he takes over, Ajay Banga will be the 14th president of the World Bank.

Banga has been elected unopposed to succeed David Malpass, who has received criticism for his stance on climate change and is stepping down early.

Also Read: Ajay Banga: US World Bank pick is a straight-talker who 'gets things done'

Ajay Banga's family, education and credentials

Despite being the first Indian-American to hold the position of World Bank President, Ajay Banga's early life may not be widely known. Originally from Jalandhar, India, Banga spent the early part of his career there before becoming a US citizen in 2007.

Ajay Banga was born to Harbhajan Singh Banga, an ex-lieutenant general of the Indian Army, and Jaswant Banga. His family comprises of his wife Ritu Banga and two daughters, Aditi Banga and Jojo Banga. While Ritu is the co-founder of Zoomdojo, Aditi is the head of Creator Monetization and Innovation Partnerships at Instagram, and Jojo is a Harvard graduate.

Banga completed his education at Hyderabad Public School. He obtained his Bachelor of Arts degree (Honours) in Economics from St. Stephen's College under the esteemed Delhi University, and further went for his postgraduate studies at IIM Ahmedabad.

From Mastercard CEO and President and Vice President, General Atlantic to World Bank Chief: Ajay Banga’s distinguished career

Ajay Banga, whose full name is Ajaypal Singh Banga, aged 63, served as the CEO and President of Mastercard from July 2010 till December 30, 2020. He retired from that position on December 30, 2021, to join General Atlantic as its vice chairman. Banga garnered significant experience working with reputable organisations such as Citigroup and Nestlé for over a decade in India.

Banga has held several leadership positions in various organisations, including serving as the Honorary Chairman of the International Chamber of Commerce between 2020 and 2022. He was also a Co-Chair of the Partnership for Central America, which aimed to promote economic opportunities in underserved populations in El Salvador, Guatemala, and Honduras. Additionally, he served on the boards of Kraft Foods, the American Red Cross, and Dow Inc.

Banga was involved in the launch of PepsiCo's global restaurant franchise in India. In recognition of his contributions, the Indian government awarded him with the Padma Shri in 2016.

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How was Ajay Banga elected as the president of the World Bank?

The World Bank follows an election process set as per an agreement made by its shareholders in 2011. According to it, “The process comprised an open, transparent, and merit-based nomination, allowing any member country of the bank to propose a candidate through an Executive Director or Governor.” Following the process, Banga went through a comprehensive due diligence, and further an interview with the Executive Directors, as per the official press release.

The election was held right after the World Bank board members conducted a four-hour interview with Banga on May 1. The decision was made through a vote of 24 board members. Russia abstained from the vote, marking a deviation from the conventional consensus-based approach.

Malpass will step down from his role on June 1, 2023, and Banga will take over as the new World Bank President from June 2, 2023.

Reportedly, Malpass was earning $525,000 in net salary as of 2021, and his contract allows him a pension measuring up to about 70 percent of his salary since April this year. Banga is expected to be compensated along those lines as well.

Also Read: World Bank is planning a new $170 billion crisis fund: David Malpass

Ajay Banga’s goals and challenges as the new World Bank chief

Banga's appointment as the World Bank President is significant as it comes at a crucial juncture when lower and middle-income countries are facing the threat of increasing debts, and the food and energy markets are being impacted by the ongoing crisis resulting from Russia's aggression in Ukraine. Banga will be spearheading all of the World Bank Group's endeavours to confront the most arduous development issues that developing nations are facing. He will guide the organisation towards growth and development, to tackle worldwide challenges that have a direct impact on its primary objective of poverty alleviation, such as climate change.

Further, Banga is expected to have a crucial role in driving further reforms by establishing collaborations between governmental and commercial entities as well as non-profit organisations.

Ajay Banga’s key roles as World Bank chief

When Banga becomes the World Bank President next month, he will also assume various other significant positions. These include being the Chair of the Board of Executive Directors of the International Bank for Reconstruction and Development (IBRD) as well as the ex-officio Chair of the Board of Directors of the International Development Association (IDA), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). He will also be the Administrative Council Chair of the International Centre for Settlement of Investment Disputes (ICSID).

Upon his appointment, Finance Minister Nirmala Sitharaman said, “We all eagerly anticipate that Banga would effectively utilise his corporate experience to reduce poverty and promote shared prosperity in developing countries.”