The Reserve Bank of India (RBI) on Friday said it has set up a committee to study issues relating to financial benchmarking and examine if they have become obsolete and need changes.
The committee under RBI executive director Vijaya Bhaskar will study all major financial benchmarks in India to assess their relevance,fallback mechanisms if a benchmark becomes obsolete,suggest inclusion of new benchmarks or exclusion of some of the existing ones.
The committee,which will have representation from select market participants,Clearing Corporation of India Ltd and academia,has been asked to submit its report by December 31.
There is a need to review the process of computation and dissemination of major financial benchmarks in India,the governance mechanisms in the institutions involved in computing the benchmarks and other related issues, RBI said in a statement. It,however,did not throw light on the details of the benchmarks that would be studied.
Apart from studying the international experience,the committee will examine the governance mechanisms within the organisations which compute the benchmarks with a view to assessing conflicts of interest,if any.
The terms of reference of the committee also include looking into the need for regulators involvement in computation and dissemination of benchmarks and if the need be,to advise on appropriate systems and processes. The panel is also required to propose a system of supervisory oversight in respect of institutions involved in computing and disseminating the benchmarks.
A market expert said that financial benchmarks like the Mumbai inter-bank offer rate and RBI reference rate for the dollar and the euro may be a part of the study.