The report projects that by 2020, Asia will be dramatically transformed into a region that has largely conquered extreme poverty, one of the main reasons for the bank's existence.

It estimates that by 2020 less than 25 million of East Asia's estimated two billion people will be living on less than a dollar a day.

At the same time, 90 percent of the region's people will be living in middle income countries, with its economy accounting for 45 percent of global output and 35 percent of world trade.

ADB president Haruhiko Kuroda on Monday welcomed the report.

"The report is both thoughtful and thought-provoking, and provides us with invaluable insights that will help chart the future course for ADB," he said.

A special pannel of eminent persons headed by Supachai Panitchpakdi, Secretary General of the UN Conference on Trade and Development, was set up last year to examine the trends and challenges facing the region and how these will impact on the Manila-based bank's future.

"To effectively carry out its role in a rapidly changing Asia, the ADB must radically change itself and adopt new models of development banking that allow it to be responsive to the region's evolving needs between now and 2020," Supachai said in a statement.

The report said the "New ADB" must be "more focused and driven by three changed strategic directions -- from fighting extensive poverty to supporting higher and more inclusive growth; from economic growth to environmentally sustainable growth; and from a primarily national focus to a regional and ultimately global focus."

Ben Diokno, an economist with the University of the Philippines noted that "the bank's primary role when it was established 40 years ago was lending money to developing Asian economies.

"Today we are looking at a new landscape in Asia and the bank has to change to keep pace."

He said countries like China "can be seen now as a major competitor to the ADB as a lender ... I think the idea of decentralising some of the bank's departments is a good idea as the bank no longer needs to be centralised at its Manila headquarters."

The report said the ADB must realign its operations and focus its work on six core areas -- infrastructure development, financial sector development, energy and environment issues, regional integration, technological development and innovation, and knowledge management.

"Under this new paradigm, the ADB's work would significantly differ from its main areas of activity in the past," it said.