RBI urges banks to complete move away from LIBOR from July 1st

The Reserve Bank of India issued a recommendation to banks and other RBI-regulated entities on Friday, emphasizing the need to take steps to ensure a full transition from the London Interbank Offered Rate (LIBOR) from 1 July 2023 ensure.

The Financial Conduct Authority (FCA), UK had announced on March 5, 2021 that all LIBOR settings are either no longer provided by an administrator or are no longer representative.
In the past, LIBOR was a globally recognized benchmark interest rate that indicated the cost of borrowing between banks.

“Banks/financial institutions are expected to have developed the systems and processes to manage the full transition away from LIBOR from July 1, 2023,” it said. Continued efforts to educate customers on the steps to be taken to manage the associated risks will allow for a smooth completion of the final stage of the transition, it said.

The full transition from LIBOR is a significant event in global financial markets that will require continued attention from all stakeholders to mitigate operational risk and ensure an orderly transition.

The Reserve Bank said it has taken proactive steps to address issues related to the LIBOR transition. In July 2021, it issued a recommendation on the “LIBOR Transition Roadmap”, which among other things called on banks/FIs to carry out transactions using widely accepted alternative reference rates (ARR) as soon as possible, but in any event by as of December 31, 2021 and insert robust fallback clauses in relevant LIBOR-linked financial contracts.

“Banks/Financial Institutions (FIs) are advised to ensure that no new transactions they or their clients undertake are based on or priced using US Dollar LIBOR or the Mumbai Interbank Forward Outright Rate (MIFOR),” said the RBI.

Financial Benchmarks India (FBIL) will stop publishing MIFOR after June 30, 2023, she added.

Also Read: India Retail Inflation Drops to 4.70% in April, Staying Within RBI’s Tolerance Range for Second Consecutive Month

Also read: IIP data: Industrial production increases by 1.1% in March 2023 compared to 2.2% in the same month last year

https://www.zeebiz.com/personal-finance/banking/news-rbi-asks-banks-to-complete-transition-away-from-libor-from-july-1-234787 RBI urges banks to complete move away from LIBOR from July 1st

Russell Falcon

Nytimepost.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@nytimepost.com. The content will be deleted within 24 hours.

Related Articles

Back to top button