RBI asks banks to stop Libor soon

WHY IN NEWS? Reserve Bank of India (RBI) issued an advisory to banks and other financial institutions to be prepared for year-end transition from London Interbank Offered Rate (Libor). Transition from Libor Global transition from Libor became necessary because banks were manipulating rate in 2007-08. Following the incident, investigation was led by Financial Services Authority (FSA) of Britain. Highlights India’s exposure to borrowings linked to benchmark is estimated to be around $331 billion. RBI asked banks and other financial institutions to incorporate robust fall-back clauses before cessation date, in all financial contracts where maturity is after announced cessation date of....Read More