A. Preamble
Board of Governors instructed the management of the Bank to initiate a program to encourage the other ECO member countries to be also member to the ECO Trade and Development Bank (ETDB) and the Board of Directors to monitor the implementation of the program. In this perspective, “ETDB New Membership Principles” was designed to attract new members in an easy way in accordance with their preferences.
B. Pre-conditions
1. The membership to the Bank shall be open to the countries, banks and other financial institutions in accordance to the Article-3 “Membership” of the establishment Agreement of the ETDB.
2. Number of Shares:
The three ECO founding members viz. Islamic Republic of Iran, Islamic Republic of Pakistan and Republic of Türkiye shall at all times hold equal number of shares and their total holding of shares shall always form the majority share capital of the Bank.
3. The canditade member shall present a Letter of Intent to the ETDB to confirm its decision to accede to the Articles of Agreement of the ETDB including the amount of subscription to the capital of the Bank.
C. Decision on the admission of new members
According to sub-paragraph 4 of the Article 4 “Authorized and Subscribed Capital‟ and Article 14/ii of the establishment Agreement of the ETDB states that;
“In case of admission of new members the terms and conditions of their subscription of capital shall be determined by the Board of Governors‟.
D. Resolution of the Board of Governors (BoG)
In conformity with the Article 14 of the Articles of Agreement, the Board of Governors, at the 4th meeting (12 December 2007) and at the 8th meeting (25 February 2011) of the ETDB, decided that;
- Any new member should not have more than 15 per cent share in the Bank.
- The minimum amount of subscription to the paid-in capital should not be less than 2.000.000 EU in order to become a member of the Bank.
E. Increase of the subscribed capital
In light of the sub-paragraph 5 of the Article 4 of the establishment Agreement of the ETDB, the authorized capital or the subscribed portion of it may be increased by the vote of the Board of Governors. Therefore, the capital of the Bank shall be increased by the Board of Governors resolution in order to implement the capital subscription by the new members. In each capital increase the proportion between the paid-up shares and the callable shares would be determined by the Board of Governors. The minimum shares of the founding members of ETDB would be 17,24 percent for each inconformity with the Article-3 “Membership” of the establishment Agreement of the ETDB.
F. Admission of New Member States to the ETDB
The increased capital will be allocated for the new members in a wide range of shares. The subscription of the new member to the capital shall be for paid-in shares and callable shares in the proportion subscribed by the existing members of the Bank. Shares shall be issued at par unless the Board of Governors decides to issue them in special circumstances on other terms. Accordingly, in order to be a member of the Bank, the amount of EU 2 million has been defined as a minimum limit for subscription to the paid-in capital, while the maximum amount is limited to 15 percent share in the Bank.
The new member shall deposit an instrument of ratification or acceptance of the Articles of Agreement establishing the Bank at the Principal Office of the Bank i.e. Headquarters of the Bank at Istanbul.
G. Payment of the subscribed capital
The Board of Governors Resolution No. 03, dated 06.10.2006 with regard to the payment of the subscribed capitals by founding members shall remain effective.
The new member of the ETDB would pay their share of subscribed capital as defined below:
Paid-in capital
(i) Initial payment; The amount equivalent to the 20 percent of shares subscribed to the paid-in capital shall be paid initially within 90 days upon the date that the new member deposits its instrument of accession to the Establishment Agreement of the Bank;
(ii) The amount equivalent to the 80 percent of shares subscribed to the paid-in capital shall be paid in 5 equal consecutive annual installments starting with the date 12 calendar months after the date of initial payment.
(iii) The new member may decide to complete the installments payment schedule earlier than the schedule provided in sub-para (ii) hereinabove.
Callable capital
The callable shares subscribed by the new member is subject to call only as and when required by the Bank to meet its liabilities in accordance with provisions of Article 4 of the Articles of Agreement establishing the Bank.
H. Composition of the Board of Governors
The Article 13 of the establishment Agreement of the ECOBANK describes the composition of the Board of Governors as follows;
Each member country shall be represented on the Board of Governors and shall appoint one Governor and one Alternate Governor. Banks and other financial institutions of a particular member country having contributed towards capital of the Bank shall be represented by the Governor appointed by their Government.
I. Composition of the Board of Directors
Considering the provision of Article 16 (para 1) of the Articles of Agreement establishing the ECO Trade and Development Bank regardless of their share of the voting rights, the first three new members joining the Bank shall be entitled to appoint one Director and one Alternate Director until the number of members of the Bank become seven.Concurrent with the decision to accept application of a country as seventh member of the Bank, the Board of Governors, shall take an appropriate decision with regard to the representation of non-founding members of the Bank on the Board of Directors of the Bank. The voting rights of all members shall be as per Article 19 of the Articles of Agreement establishing the Bank.