China's top legislature on Wednesday ratified the Asian Infrastructure Investment Bank (AIIB) agreement, which establishes the legal framework for the bank.

Lawmakers voted on the agreement at the closing meeting of the bimonthly session of the National People's Congress (NPC) Standing Committee. The ratification is a significant step closer to the AIIB's formal establishment, slated for the end of 2015, as China is the bank's largest shareholder.

The China-backed multilateral development institution is tasked with financing infrastructure construction across Asia.

Among the bank's 57 prospective founding members, 54 had signed the agreement as of last month, and the other three are expected to sign before the end of this year. All prospective members should have their legislatures ratify the agreement before the end of 2016 to formally become founding members.

As long as at least 10 signatories, and no less than 50 percent of the capital contribution, obtain legislative approval, the agreement will become effective, Finance Minister Lou Jiwei told lawmakers.

Lou said Myanmar, Singapore and Brunei have received legislative approval, with more than 30 percent in capital contribution.

The 60-article agreement outlines the financial share of each founding member as well as rules for policymaking, governance structure, and business and operational systems.

The AIIB will promote sustainable development of the Asian economy, create wealth and improve infrastructure connections, Lou said.

The bank will cooperate with other multilateral and bilateral development organizations to promote regional cooperation and deal with challenges, according to Lou.

The AIIB shows that China is committed to establishing an open, just and transparent international economic governance system, and it will provide a new platform for cooperation among member states, he said.

With authorized capital of $100 billion , the AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and health care.

Asian members' financial contribution is three times more than non-Asian members.

Based on the capital contribution, China holds a voting stake of around 26 percent, the highest of all members. As new members join, all founding members' shares and voting stakes will be "gradually diluted," Lou explained.

He said that Jin Liqun, president-designate of the institution and head of the working group to establish the AIIB, will be formally elected AIIB president at the first board of directors' meeting, slated for after the formal establishment of the bank.

Jin has held positions with the World Bank and the Asian Development Bank.

The AIIB has a three-tier structure -- a board of governors, a board of directors and a management team.

Jin earlier said the AIIB will be "lean, clean and green."

Lou said the AIIB should be exempted from all taxes and tariffs and the wages of its staff should also be exempted from taxation.

Though all state-backed initiatives, the AIIB, the New Development Bank for BRICS countries and the Silk Road Fund will work independently.

(Xinhua News Agency November 4, 2015)