LIBOR transition: SBI says ready to embrace new alternatives

The country's largest lender SBI on Thursday said it is ready to embrace new interest rate benchmarks necessitated due to the LIBOR cessation.

All its systems and processes are aligned to support transactions linked to these alternate reference rates (ARR), an official statement said.

It added that SBI has already started offering ARR-based products to customers through its domestic and foreign branches.

"SBI has been assiduously tracking the global developments in the LIBOR (London Inter-Bank Offer Rate) space to align with the best practices and has proactively modified its systems and processes to embrace the change from LIBOR to ARR," its Managing Director (International Banking, Technology and Subsidiaries) Ashwini Kumar Tewari said.

The bank said it will spread awareness about the transition among customers and extensive client groups through curated knowledge sharing sessions.

In its Financial Stability Report released on Wednesday, the Reserve Bank of India (RBI) had also touched upon the need to migrate to the alternatives.

"The impending transition of sterling, euro, Swiss franc and Japanese yen LIBOR settings in all tenors and US Dollar LIBOR 1-week and 2-month settings after end-December 2021, has imparted urgency to moving towards benchmarking of products in alternate risk-free rates (ARRs) and development of interest rate derivative segments linked to ARRs," it had said.