13th July, 2021 Economy
- The Reserve Bank of India (RBI) issued an advisory to banks and other financial institutions, asking them to be prepared for the year-end transition from the London Interbank Offered Rate.
- Banks are also encouraged to cease using the Mumbai Interbank Forward Outright Rate (Mifor), published by the Financial Benchmarks India Pvt Ltd (FBIL) and which references the Libor, as soon as practicable and in any event by 31 December.
- The London Interbank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
- LIBOR is administered by the Intercontinental Exchange, which asks major global banks how much they would charge other banks for short-term loans.
- LIBOR is being replaced by the Secured Overnight Financing Rate (SOFR) on June 30, 2023, with phase-out of its use beginning after 2021.
- The Mumbai InterBank Overnight Rate, or MIBOR, is the overnight lending offered rate for Indian commercial banks.
- MIBOR is calculated based on input from a panel of 30 banks and primary dealers.
- MIBOR was first established in 1998, and modeled after the more famous London InterBank Overnight Rate (LIBOR).