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    Question

    The Reserve Bank of India has announced plans to shift

    away from the MIBOR benchmark. Which of the following represents the new benchmark rate proposed by RBI, derived from secured money market transactions such as basket repo and TREP?
    A Secured Overnight Financing Rate (SOFR) Correct Answer Incorrect Answer
    B Secured Overnight Funding Rate (SOFR) Correct Answer Incorrect Answer
    C Secured Overnight Rupee Rate (SORR) Correct Answer Incorrect Answer
    D Secured Overnight Repo Rate (SORR) Correct Answer Incorrect Answer
    E Secured Overnight Interbank Rate (SOIR) Correct Answer Incorrect Answer

    Solution

    To strengthen India’s interest rate benchmark framework, the RBI constituted the Committee on the MIBOR Benchmark, chaired by Shri Ramanathan Subramanian. The committee recommended replacing the Mumbai Interbank Outright Rate (MIBOR) with a more robust benchmark based on secured market transactions. Accordingly, RBI proposed the Secured Overnight Rupee Rate (SORR), which is derived from secured money market instruments like basket repos and TREPs. This benchmark is expected to: • Improve transparency and reliability, • Reduce dependence on unsecured market rates, and • Align India’s financial markets with global best practices.

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