Banks push for new rate benchmark

A group of Indian lenders has asked the central bank to approve a new benchmark for overnight indexed swaps, according to people familiar with the matter.

- Bloomberg

The banks want the swaps to reference the newly-proposed Secured Overnight Rupee Rate (SORR) instead of the prevailing Mumbai Interbank Overnight Rate (MIBOR), the people said, asking not to be named as the discussions are private.

The move is intended to improve price discovery in the interest-rate swap market, an opaque but important part of the financial system that helps banks and corporations manage their risks. An industry body reached out to banks this month to start work on the formulation of the SORR, the people said.