FBIL to launch new overnight benchmark rate from July 22

From next month, FBIL will set the overnight inter-bank interest rate benchmark, a new method based on actual trade, to promote transparency in money market transactions.
"The FBIL-Overnight Mibor (the new benchmark) shall apply on a prospective basis to contracts that have trade dates on or after Wednesday, July 22, 2015 (the effective date)," Financial Benchmarks India Private Limited (FBIL) said in a statement.
The current FIMMDA-NSE MIBOR polled overnight benchmark will cease to be published from the effective date, it added.
FBIL, set-up in December 2014, was jointly promoted by Fixed Income Money Markets and Derivatives Association (FIMMDA), Foreign Exchange Dealers' Association of India (FEDAI) and Indian Banks' Association (IBA).

"Based on a detailed analysis of overnight call money market data, the Board of FBIL 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 am and 10 am," it said.
The new benchmark will be known as the FBIL Overnight Mumbai Interbank Outright Rate (FBIL-Overnight Mibor).

The statement further said that in the wake of developments involving misconduct relating to financial benchmarks in international financial markets, the RBI set up the Committee on Financial Benchmarks in June, 2013 which reviewed the process of computation and dissemination of major financial benchmarks in India and gave recommendations on the governance framework.

As result of this, FBIL started operations in February, 2015.
The FBIL 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 stakeholders.
There will be periodic review of the benchmark methods to ensure that they are robust and conform to the best governance standards.