Oficials announced the decision as Venezuelan President Hugo Chavez hosted leaders of the Bolivarian Alliance bloc, or ALBA, at a meeting in Caracas.
The countries that have agreed to deposit 1 percent of their international reserves in the ALBA Bank include members Cuba, Ecuador, Bolivia, Nicaragua, Dominica, Antigua and Barbuda and St. Vincent and the Grenadines.
The new bank is to provide financing for economic development projects. It’s unclear how much in all the countries plan to deposit in the bank, or how the funds will be administered.
Chavez has recently withdrawn much of Venezuela’s international reserves in gold deposited in European and U.S. banks, transferring the gold to Venezuela’s Central Bank.
He has also urged Latin American countries to promote regional development banks as alternatives to the World Bank and International Monetary Fund.
Chavez has touted the left-leaning ALBA bloc among his allies as an alternative to free trade agreements that the U.S. government has advocated.
Leaders also announced at the meeting that the group will soon expand with Suriname and St. Lucia as new members.
Bolivian President Evo Morales proposed that the group form a defense council for their militaries to work more closely together.
Ecuadorean President Rafael Correa suggested that the group boycott an upcoming Americas summit in Colombia in April if Cuba is excluded from the meeting.
Chavez and his allies also used the ALBA meeting to make a statement condemning violence in Syria, which they said had been fomented by foreign powers including the U.S.
The group also backed Argentina on Saturday in its long-running dispute with Britain over the Falkland Islands.
The dispute heated up recently when Prince William, a Royal Air Force helicopter pilot, was assigned to the islands on an upcoming military tour along with a warship in the run-up to the 30th anniversary of Argentina’s April 1982 invasion, which sparked a 10-week war.
Argentina, which claims Britain stole the archipelago from it 180 years ago, calls them the Malvinas Islands and has protested the British deployment.
Chavez and other leader condemned Britain’s stance.