Cessation of LIBOR: Complete Transition - ربی - Reserve Bank of India
Cessation of LIBOR: Complete Transition
The Reserve Bank of India (RBI) has issued an advisory to banks and other RBI-regulated entities, emphasizing the need to take steps to ensure a complete transition away from the London Interbank Offered Rate (LIBOR) from July 01, 2023. The key messages in the advisory include:
The Reserve Bank will continue to monitor the efforts of banks/FIs for ensuring a smooth transition from LIBOR. Background The Financial Conduct Authority (FCA), UK, in a press statement dated March 05, 2021 announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative:
The complete transition from LIBOR is a significant event in the global financial markets which requires continued attention from all stakeholders to mitigate operational risks and ensure an orderly transition. The Reserve Bank has been proactively taking steps to deal with the issues around LIBOR transition and had issued an advisory on “Roadmap for LIBOR Transition” dated July 08, 2021 wherein banks/FIs, inter-alia, were encouraged to undertake transactions using widely accepted Alternative Reference Rate (ARR), as soon as practicable and in any case by December 31, 2021 and insert robust fallback clauses in relevant LIBOR linked financial contracts. (Yogesh Dayal) Press Release: 2023-2024/221 |