India-born Suma Chakrabarti will succeed Germany's Thomas Mirow as the President of the European Bank for Reconstruction and Development (EBRD), which has been supporting economic transition in former Eastern Bloc countries and Soviet republics for the last two decades.
Chakrabarti, a permanent secretary in the UK Ministry of Justice, has won the race for the leadership of the bank by prevailing over four other candidates, including Mirow, who sought a second four-year term.
A majority of the bank's Board of Directors, representing 63 members, voted for Chakrabarti at its annual meeting held in London at the weekend.
With the election of Chakrabarti, a British national is for the first time at the top of the London-based East European Bank.
Until now, the post was held alternatively by German and French nationals. Former German President Horst Koehler led the bank between 1998 and 2000.
Chakrabarti will begin his four-year term on July 3, the EBRD said in a press statement.
Born in 1969 in Jalpaiguri, West Bengal, Chakrabarti has been serving as a permanent secretary in the UK Ministry of Justice since November 2007.
He began his career by joining the British Overseas Development Administration in 1984 after taking his MA in Economics from the University of Sussex.
He later became a private secretary to former Minister of State for Overseas Development Lynda Chalker and in 2002 rose to the post of permanent secretary at the Department of International Development.
He had also represented the British government at the International Monetary Fund and the World Bank.
Chakrabarti said he was greatly honoured by his election as the head of the EBRD and pledged to continue the bank's "outstanding work" as it rises to the challenges facing the future.
"It is a great privilege to follow on from Thomas Mirow and I want to congratulate him for everything he had achieved," the statement quoted him as saying.
Mirow, a former state secretary in the German finance ministry, failed to secure a second term because he was not supported by the German government, media reports said.
The German government did not want to jeopardise Finance Minister Wolfgang Schaeuble's chances to succeed Jean-Claude Juncker as the next chairman of the 17-nation euro group, the reports said.
Berlin wanted to avoid the impression that Germans are heading key European financial institutions.
Klaus Regling, current head of the euro zone temporary bailout fund, European Financial Stability Facility (EFSF), is a German national.
The German government reportedly supported the French candidate Philippe de Fontaine Viwe Curtaz, but he could not get the necessary votes.
EBRD was founded at the initiative of Germany and France in 1991, two years after the collapse of the Berlin Wall, to support the central and east European states and former soviet republics in their transition to democracy and free market economy.
The bank is now poised to expand its operations to the emerging Arab democracies and to stimulate growth and investments in crisis-ridden southern and eastern Mediterranean nations.
EBRD finances currently projects in the private and public sectors in 29 countries. Last year, it had an investment volume of around 9 billion euros.
The bank is funded by contributions from its 63 member-nations as well as from the European Union and the European Investment Bank.
EBRD's top credit rating of AAA enables it to raise sufficient capital from the financial markets at favourable conditions.
It is reported to be planning to boost its funding to 11 billion euros next year.
Image: Suma Chakrabarti