US President Joe Biden said Thursday that Washington is nominating former Mastercard Chief Executive Ajay Banga to lead the World Bank, after its current chief David Malpass announced plans to step down early.

The development lender has just started accepting candidate nominations in a process set to run until March 29, with the bank saying that women candidates would be "strongly" encouraged.

The president of the World Bank is typically American, while the leader of the International Monetary Fund is customarily European.

Banga, 63, is Indian-American and currently serving as vice chairman at equity firm General Atlantic.

He was previously chief executive at Mastercard.

Banga has "critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change," said Biden in a statement.

Last week current World Bank President Malpass -- who was nominated to the post by Biden's predecessor Donald Trump in 2019 -- said he would step down nearly a year early, ending a tenure that was clouded by questions over his climate stance.

His term would originally have ended in 2024.

Banga's nomination comes amid a push for development lenders to revamp and address global problems like environmental issues more effectively.

US Treasury Secretary Janet Yellen earlier said that lenders' core models, where countries borrow to make specific investments addressing developmental constraints, is "insufficient to meet the moment."

The United States is the World Bank's largest shareholder.

Green transition

Speaking to reporters, a senior US administration official said: "At Mastercard and General Atlantic, Ajay has made combating climate change and mobilizing private capital to help power the green transition a priority."

"These are experiences and priorities that will guide and drive his work in the years ahead at the World Bank," the official said.

In a separate statement, Yellen said Thursday that she applauded Biden's decision.

Banga "has the right leadership and management skills, experience living and working in emerging markets, and financial expertise to lead the World Bank at a critical moment in its history," Yellen said.

She added that his record of forging partnerships between the public sector, private sector and non-profits will serve him in helping to "mobilize the private capital and press for the reforms needed to meet our shared ambitions."

Asked about the World Bank's encouragement for women candidates, a US official told reporters that Banga -- who was born, raised and spent an early part of his career in emerging market India -- had a "personal conviction and excellent track record" in promoting diversity in his work.