RBI's MIBOR panel advocates benchmark based on secured money market

An RBI-constituted panel on MIBOR (Mumbai Interbank Offered Rate) recommended creating a new benchmark based on the secured money market, aiming to reduce volatility and improve market stability. The existing MIBOR is based on unsecured lending between banks, which can lead to erratic rate movements. By shifting to a secured money market-based benchmark, RBI seeks to enhance market transparency and ensure better pricing of financial instruments. This change is expected to align Indian market standards with global practices, offering greater protection to participants in the financial system.