LIBOR stands for London Interbank Offered Rate. An interest rate average submitted by leading UK banks.
The Reserve Bank of India (RBI) on May 12 asked banks & RBI-regulated entities to take steps to ensure a complete transition away from the London Interbank Offered Rate (LIBOR) from July 01, 2023.
LIBOR stands for London Interbank Offered Rate. An interest rate average submitted by leading UK banks, it is a benchmark rate against which global lenders currently mark their transactions.
In the RBI’s advisory banks, financial institutions (FIs) are advised to ensure that no new transaction undertaken by them or their customers relies on or is priced using the US$ LIBOR or the Mumbai Interbank Forward Outright Rate (MIFOR).
Also, the Financial Benchmarks India Pvt. Ltd. (FBIL) will cease to publish MIFOR after June 30, 2023.
“Banks/FIs are advised to take all necessary steps to ensure insertion of fallbacks at the earliest in all remaining legacy financial contracts that reference US$ LIBOR (including transactions that reference MIFOR),” said RBI’s official statement.
“Banks/FIs are expected to have developed the systems and processes to manage the complete transition away from LIBOR,” added.
Earlier on March 05, 2021, The Financial Conduct Authority (FCA),of United Kingdom (UK) announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative.
