Mumbai: ICICI Bank today announced that it has executed its first interbank – money market transaction linked with Secured Overnight Funding Rate (SOFR). The transaction, executed through the Bank’s Hong Kong branch on Wednesday, is part of the Bank’s Benchmark Transition Management plan to assess the preparedness towards a smooth transition to the new Alternative Reference Rates (ARRs).
SOFR has been identified as the replacement for USD LIBOR (London Interbank Offered Rate). Globally, there is a move to migrate from LIBOR to transactions linked to ARRs and it is expected that fresh transactions after December 2021 would not be referenced to LIBOR.
Commenting on the transaction, Mr. Sriram H. Iyer, Head-International Banking, ICICI Bank said, “The Bank has been tracking the developments with respect to the benchmark reforms and has been working with various stakeholders to ensure smooth transition from LIBOR to new ARRs in the Indian market. With these transactions, we are working towards building internal capabilities to transition to the new ARRs in line with various regulatory timelines.”
Added, Mr. B. Prasanna, Group Head – Global Markets, Sales, Trading and Research, ICICI Bank, “Transition from LIBOR to ARR is a critical event in financial markets. ICICI Bank is at the forefront of the financial markets to help transit from LIBOR and the transaction is part of the transition initiatives by the Bank.”