Financial Benchmarks India Pvt Ltd to begin setting overnight benchmark rates

KOLKATA: The Board of Financial Benchmarks India Pvt Ltd (FBIL) will begin issuing new overnight benchmark rates prospectively for contracts that have trade dates on or after July 22.

The FBIL has taken over the administration of the overnight inter-bank MIBOR benchmark rate from the National Stock Exchange, as the first step towards taking over responsibility of setting the benchmark.

The FBIL also proposes to take over administration of forex benchmarks and other Indian Rupee interest rate benchmarks over a period of time after careful examination of the methodology and utility to the financial markets in consultation with the stakeholders.

The board has decided to adopt a benchmark based on trade weighted inter-bank call money transactions on the Clearing Corporation of India Ltd’s (CCIL) NDS-Call platform between 9 A.M. and 10 A.M. CCIL will be the calculating agent.

The new benchmark, which will be known as the FBIL Overnight Mumbai Interbank Outright Rate ( FBIL-Overnight Mibor), is envisaged in the wake of misconducts relating to financial benchmarks in international financial markets.

FBIL was jointly formed by FIMMDA, Foreign Exchange Dealers’ Association of India (FEDAI) and Indian Banks’ Association (IBA). FBIL was incorporated in December 2014 and has commenced operations in February 2015.