Joe Biden has picked the former president and CEO of MasterCard, Ajay Banga, who comes with decades of experience on Wall Street, to lead the World Bank and oversee a shake-up at the development organisation to shift its focus to the climate crisis.

Biden's choice of Ajay Banga, an American citizen born in India, comes a week after David Malpass, a Donald Trump appointee, quit the role.

The World Bank’s governing body is expected to decide in May, but the US is the Washington-based organisation’s largest shareholder and has traditionally been allowed to nominate without challenging its preferred candidate for the post.

The move comes as the US increases pressure on the bank to put more emphasis on tackling climate change.

Malpass, who is due to step down on June 30, was nominated by Trump in February 2019 and is known to have lost the confidence of Biden’s head of the US Treasury Department, Janet Yellen, who with other shareholders, wanted to expand the bank’s development remit to include the climate crisis and other global challenges.

On Wednesday, the bank said it planned to interview a shortlist of up to three candidates and aim to name a new leader by early May. It said female nominees were strongly encouraged.

It is not clear if other countries will make other suggestions. Commenting on the US's nomination of Banga for the top post, Yellen said Banga was "uniquely" equipped to take on that charge, pointing to his track record of forging partnerships between governments, companies, and non-profits.

Banga started his career in India, where he worked at Nestle and Citigroup before joining Mastercard. He retired from the firm in 2021 and now serves as a vice chairman at General Atlantic, a private equity firm, where he sits on the advisory board of its $3.5 billion climate fund. He has also worked with the White House as co-chair of the Partnership for Central America, an initiative aimed at increasing private sector investment in the area, to try to stem the flow of migrants to the US.

The World Bank's leadership is fraught with myriad challenges

Whoever becomes the bank's next leader will face the challenge of trying to balance the immediate financial needs of low-income countries, many of which are facing debt crises, while shifting to tackle issues such as climate change, global conflict, and pandemic risks—all without any clear additional money on the table.

It may be mentioned that David Malpass is under fire from environmental advocates for being slow to direct the bank's resources to address climate change.

Last year, he was publicly rebuked by the White House after he said he did not know if fossil fuels were driving climate change.