Seoul, March 26 (IANS): South Korea on Thursday decided to join the China-proposed Asian Infrastructure Investment Bank (AIIB) as one of prospective founding members, the country's finance ministry said.

The ministry of strategy and finance said in a statement that the South Korean government decided on it after holding discussions on the issue among related ministries, before sending a letter about the decision to China, Xinhua news agency reported.

If South Korea is allowed by other prospective founding members to join the AIIB, the country is expected to sign a formal agreement on it around June, before finally becoming one of the founding members of the AIIB, according to the ministry.

The AIIB is a newly-launched multilateral development bank to help finance infrastructure projects in Asia for sustainable growth and social development in the region, the ministry said.

According to the Asia Development Bank (ADB) data, Asia's infrastructure demand is expected to reach some $730 billion per year by 2020, but the supply of investment funds from the World Bank and the ADB falls far short of the demand.

Thus, the AIIB aims to strengthen economic and financial cooperation among countries in the region and pioneer economic development by focusing on providing funds for regional development, the ministry said.