Mumbai: Axis Bank, India’s third largest private sector bank, has announced its first derivative transaction linked to SOFR (Secured Overnight Financing Rate). SOFR is the recommended US Dollar interest rate benchmark, which is expected to replace LIBOR at the end of 2021. With SOFR transaction, Axis Bank has crossed an important milestone associated with the Libor transition journey.

“The global financial markets are witnessing a significant structural change because of LIBOR transition. This affects all market participants including banks in India. We are excited to be one of the first banks in India to have achieved this milestone.”

Neeraj Gambhir
Group Executive & Head – Treasury, Markets & Wholesale Banking Products, Axis Bank

LIBOR has been a well-entrenched interest rate benchmark in the global financial markets. It is planned to be replaced with Risk Free Rates (RFR) of respective currencies by the end of this year. Given its far-reaching impact, LIBOR transition is a well flagged event in the global derivatives markets and has kept banks, benchmark administrators, regulators and other market participants engaged over the last year or more.

Globally, Banks are currently in the process of putting the necessary infrastructure in place for trading in ARR linked derivatives. This, along with the recent publication of ‘Adjusted MIFOR’ and ‘Modified MIFOR’ by the Financial Benchmark India Private Limited, demonstrates India’s preparedness for LIBOR transition.

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture and Retail Businesses.

With its 4,594 domestic branches (including extension counters) and 11,333 ATMs across the country as on 31st March 2021, the network of Axis Bank spreads across 2,559 centers, enabling the Bank to reach out to a large cross-section of customers with an array of products and services.

The Axis Group includes Axis Mutual Fund, Axis Securities Ltd., Axis Finance, Axis Trustee, Axis Capital, A.TReDS Ltd., Freecharge and Axis Bank Foundation.

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