With banks and financial institutions clambering to match their asset with liabilities along lines laid down by the Reserve Bank of India, the interest rate swap has come as the perfect tool for managing balance sheets.
Although initial euphoria over interest rate swaps seems to be on the decline_the markets were bursting with activity on the first day, the silence was killing on the very_players assert that this is just the beginning. Having been permitted to undertake domestic swaps, the market is addressing two main issues: the evolution of an acceptable benchmark and lengthening of the swap tenor.
Says Amit Gupta, head of treasury marketing, HSBC Markets, "After a flurry to strike `banner' deals on the first day, there is a lot of discussion on the kind of benchmarks that can be used. At present, there are just two products and a couple of bench