BENGALURU, India — The Biden administration nominated Ajay Banga, the former longtime chief executive of Mastercard, to be the next president of the World Bank, a selection that is likely to drastically reshape the global development institution and broaden its ambitions to combat climate change.
The nomination will initiate a monthslong confirmation process before a final decision by the World Bank’s board. It is not clear if any other countries will nominate a candidate. The World Bank president is traditionally an American citizen chosen by the United States.
If confirmed, Mr. Banga will bring vast experience running large organizations and deep knowledge of the digital economy. Raised in India, he would bring a firsthand understanding of the challenges that developing countries face.
“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” President Biden said in a statement. “He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change.”
Speculation surrounding the nomination has gathered momentum in the last week since David Malpass, the current World Bank president, announced his intention to step down by the end of June, with nearly a year left in his five-year term. Mr. Malpass, who was picked by former President Donald J. Trump, drew criticism from climate activists and stirred frustration among Biden administration officials for his lack of focus on the bank’s climate agenda.
Those concerns came to a head in September, when Mr. Malpass came under fire for his views on climate change. When asked if he accepted the overwhelming scientific consensus that the burning of fossil fuels was causing global temperatures to rise, he demurred. “I’m not a scientist,” he said. The exchange, during a live interview at a New York Times event, set off a slow-motion public relations crisis for Mr. Malpass.
Mr. Banga has sought to carve out a public stance signaling his concern for climate change, including at Mastercard. In 2020, under his watch, the company announced the creation of the Priceless Planet Coalition, a group of about 100 firms that make corporate investments to preserve the environment.
“No matter who you are or what you do, climate change affects you. But, it has the biggest negative impact on those who are socially and economically vulnerable,” Mr. Banga said at the time.
Still, his selection could disappoint some climate activists who have been calling on the Biden administration to nominate a president with a strong background in environmental issues. His lack of direct public sector experience could also be viewed with skepticism by some development experts.
“I think it’s interesting that they’re not tapping a climate expert per se, they are tapping someone who can help them with climate finance,” said Scott Morris, a senior fellow at the Center for Global Development. “It sends a pretty clear signal that the U.S. wants to look at the bank as a bank.”
A central part of the next World Bank president’s job will be re-engineering the institution to make it a more pivotal player in a coordinated effort by Western nations to address global warming, despite some developing countries’ concerns that the mission could overtake the bank’s poverty reduction goals.
Mr. Banga has described the challenge of climate change, which he called “humanity versus nature,” as a matter of trade-offs that has for years stumped politicians.
“You end up applying what are shorter-term solutions to what are very long-term problems,” Mr. Banga said in 2021 in a conversation at the Council on Foreign Relations. “And therefore you end up putting a band aid on an open wound.”
Mr. Banga has become a close ally of Vice President Kamala Harris and is part of a group of 10 corporate executives who have worked with her office to raise $1 billion aimed at stemming the root causes of immigration from Central America. Ms. Harris has cited poverty, corruption, climate change and political instability as the factors fueling migration.
The collaboration has so far raised about $4 billion to support communities in the region. In an interview with The New York Times last fall, Mr. Banga said he approached the effort with the understanding that it would not result in any short-term wins.
“Investing in a region takes patience, time and resilience,” Mr. Banga said. He said Ms. Harris first became aware of his work assisting Syrian refugees with food. “It’s not just having a vision, it’s having a practical reality that enables the vision to become something that’s tangible,” Mr. Banga said of his approach to using private sector funds to assist migrants.
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Mr. Banga is currently a vice chairman of General Atlantic, a private equity firm. He retired from Mastercard in 2021 after running the company for more than a decade, quadrupling its profits and becoming one of the most prominent Indian American executives in the United States.
Before Mastercard, Mr. Banga worked for more than a decade at Citigroup and at Nestlé in India.
The son of an army general, Mr. Banga has said that his upbringing, which involved moving around different cities in India, made him highly adaptable.
“The one thing it did for me more than anything else was this easy adaptability, the willingness to adjust and the willingness to just fit in; I think it’s helped me in all my life,” Mr. Banga told The New York Times in 2020.
Mr. Banga has said that his experience of being an immigrant to the United States inspired his ambition to bring 500 million people around the world who are “unbanked” into the financial system. Although he had a good income when he moved to the United States in 2000, the fact that he was not yet a citizen with a credit history made it a challenge to even buy a cellphone.
“I call myself financially excluded at that time,” Mr. Banga said at an event hosted by the Center for Strategic and International Studies in 2020. “Financial exclusion is not just people who don’t have an income.”
He added: “It’s people who cannot fit into the way we have built our financial system, so we need to find ways to help people navigate that.”
Although the selection of Mr. Banga was widely praised, the choice of a president with such an extensive corporate background did draw some backlash from progressive corners.
“President Joe Biden and Secretary Yellen have literally named the vice chairman of a rapacious international private equity firm (General Atlantic) to take his first job ever in public service at nearly the highest level in the world possible,” Jeff Hauser, executive director of the Revolving Door Project, a group fighting the influence of Wall Street and corporate America, said in a statement.
The World Bank’s board of executive directors met this week to open up the nomination process and lay out the criteria for in its next leader. Those qualities included a proven track record of leadership and accomplishment, particularly in development, and experience managing large international organizations while being familiar with the public sector.
The board of executive directors said that it “would strongly encourage women candidates to be nominated.”
The bank has never had a woman serve as its permanent president, although Kristalina Georgieva, who is the managing director of the International Monetary Fund, served as acting president in 2019.
Countries have until March 29 to put forward other nominees. The World Bank’s board hopes to select a new president by May.
Biden administration officials said that they did not know if any other country would offer a nominee and explained that they were able to nominate Mr. Banga so quickly because they had been preparing for the end of Mr. Malpass’s term next April. Asked about why the White House did not select a woman, as the executive board suggested, the officials pointed to Mr. Banga’s dynamic background and noted that he has a strong track record of promoting gender equality and inclusion within organizations.
“His management record on women will be important for the board to consider since NGOs and others will focus on the missed opportunity to nominate a woman,” said Paul M. Cadario, a former senior manager at the World Bank who is now a distinguished fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy.
Treasury Secretary Janet L. Yellen, who is in India for a gathering of finance ministers of the Group of 20, hinted earlier on Thursday that a nomination was forthcoming and said that the process would be transparent and merit-based.
In a statement following the announcement of the nomination, Ms. Yellen said that Mr. Banga’s background would make him an important partner at the World Bank for reducing poverty and combating climate change.
“Ajay Banga understands that those core objectives are deeply intertwined with challenges like meeting ambitious goals for climate adaptation and emissions reduction, preparing for and preventing future pandemics, and mitigating the root causes and consequences of conflict and fragility,” Ms. Yellen said.
Coral Davenport and Zolan Kanno-Youngs contributed reporting from Washington.
