Mumbai : State Bank of India ,State Bank Of India) has adopted a new benchmark in place of the London Inter-Bank Offered Rate (LIBOR), which has been used for decades to price foreign currency loans. The global benchmark for new contracts will be abandoned from December 2021 at the behest of international regulators because of its vulnerability to manipulation and the risk of its overuse during a crisis.
In a statement issued on Thursday, SBI said that it has already started offering arrival (optional reference rate) – based product to customers. The country’s largest bank has also started a knowledge-sharing session to increase awareness about the new product amongst corporate customers.
SBI was one of the first banks to sign the global protocol in December 2020 and has already demonstrated its readiness by executing transactions using an alternative benchmark such as the Safe Overnight Financing Rate.SOFR) for large borrowers in international markets like Indian Oil.
Under the LIBOR transition process, from January 1, 2022, all new transactions will be directed with reference to the new benchmark rates. reserve Bank of India and global banking regulator. Apart from SOFR, Sterling Overnight Interbank Average Rate (Sonia) is another popular option used by lenders.
In a statement issued on Thursday, SBI said that it has already started offering arrival (optional reference rate) – based product to customers. The country’s largest bank has also started a knowledge-sharing session to increase awareness about the new product amongst corporate customers.
SBI was one of the first banks to sign the global protocol in December 2020 and has already demonstrated its readiness by executing transactions using an alternative benchmark such as the Safe Overnight Financing Rate.SOFR) for large borrowers in international markets like Indian Oil.
Under the LIBOR transition process, from January 1, 2022, all new transactions will be directed with reference to the new benchmark rates. reserve Bank of India and global banking regulator. Apart from SOFR, Sterling Overnight Interbank Average Rate (Sonia) is another popular option used by lenders.
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