CURRENT AFFAIRS

2023

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
By which month of the year has RBI instructed banks to end reliance on LIBOR and adopt an alternative reference rate?
A
July 2023
B
May 2023
C
August 2023
D
June 2023
Explanation: 

Detailed explanation-1: -RBI ask banks to complete transition away from LIBOR from July 1. The Reserve Bank of India on Friday issued an advisory to banks and other RBI-regulated entities, emphasising the need to take steps to ensure a complete transition from the London Interbank Offered Rate (LIBOR) from July 1, 2023.

Detailed explanation-2: -Clients with LIBOR exposures due to mature beyond 2021 (or June 2023, for certain USD LIBOR settings) are exposed to the risk of the permanent cessation of LIBOR.

Detailed explanation-3: -The British Bankers’ Association launched LIBOR in 1986-initially with only three currencies-the dollar, the yen, and the pound sterling. LIBOR was established as a standardized benchmark for the pricing of floating-rate corporate loans.

Detailed explanation-4: -The current RBI’s accounting year runs from July to June while the government follows the April-March fiscal year.

There is 1 question to complete.