Ajay Banga was on Wednesday appointed as the next President of the World Bank, becoming the first-ever Indian-American to head the global financial institution which said it looks forward to working with him at a time when it's tackling the toughest development challenges facing developing countries.

"The Executive Directors of the World Bank today selected Ajay Banga as President of the World Bank for a five-year term beginning June 2, 2023," the bank said in a press statement.

In February, President Joe Biden announced that the US would be nominating Banga, 63, to lead the World Bank because he is "well equipped" to lead the global institution at "this critical moment in history." 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 statement added.

Banga, who was awarded the Padma Shri in 2016, most recently served as Vice Chairman at General Atlantic. Previously, he was President and CEO of Mastercard, a global organisation with nearly 24,000 employees.

He is the first-ever Indian-American and Sikh-American to head either of the two top international financial institutions: the International Monetary Fund and the World Bank.

The World Bank Executive Directors followed the selection process agreed by shareholders in 2011. The process included an open, merit-based, and transparent nomination where any national of the Bank’s membership could be proposed by any Executive Director or Governor through an Executive Director, the statement said.

This was then followed by thorough due diligence and a comprehensive interview of Banga by the Executive Directors, it added.

The President of the World Bank Group is also the Chair of the Board of the Executive Directors of the International Bank for Reconstruction and Development. The President is also ex officio chair of the Board of Directors of the International Development Association, International Finance Corporation, the Multilateral Investment Guarantee Agency, and of the Administrative Council of the International Centre for Settlement of Investment Disputes.

Raised in India, Banga has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity, President Biden had said.

Banga is expected to take over the reins of the anti-poverty lender at a crucial time, with the US and Western nations pitching for reforms to focus on addressing a slew of wide-ranging global issues like climate change.

"Ajay is uniquely equipped to lead the World Bank at this critical moment in history," President Biden said in a statement at the time of his nomination.

"He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organisations through periods of fundamental change," Biden said.

Vice President Harris said Banga will be a transformative World bank President as the institution works to deliver on its core development goals and address pressing global challenges, including climate change.

Banga has worked closely with Vice President Harris as the Co-Chair of the Partnership for Central America.

US Treasury Secretary Janet Yellen had applauded Biden for nominating Banga for this position.

"He (Banga) has the right leadership and management skills, experience living and working in emerging markets, and financial expertise to lead the World Bank at a critical moment in its history, deliver on its core development goals, and evolve the Bank to meet global challenges like climate change,” Yellen said.

Banga is honorary chairman of the International Chamber of Commerce, serving as chairman from 2020-2022. He is also chairman of Exor and independent director at Temasek. He became an advisor to General Atlantic’s climate-focused fund, BeyondNetZero, at its inception in 2021.

He previously served on the Boards of the American Red Cross, Kraft Foods and Dow Inc. He is a member of the Trilateral Commission, a founding trustee of the U.S.-India Strategic Partnership Forum, a former member of the National Committee on US-China Relations, and Chairman Emeritus of the American India Foundation.

Banga is a co-founder of The Cyber Readiness Institute, Vice Chair of the Economic Club of New York and served as a member of President Barack Obama’s Commission on Enhancing National Cybersecurity. He is a past member of the US President’s Advisory Committee for Trade Policy and Negotiations.

He was awarded the Foreign Policy Association Medal in 2012, the Ellis Island Medal of Honour and the Business Council for International Understanding's Global Leadership Award in 2019, and the Distinguished Friends of Singapore Public Service Star in 2021.