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The banking regulator additionally identified, within the assembly, that some banks had been nonetheless offering new commerce credit linked to Libor, which was in opposition to the regulator’s advisory.
A senior financial institution government, aware about the event, stated that the difficulty was largely associated to legacy contracts, and most lenders have inserted fallback clauses.
“Whereas in some instances, adjusted Libor was getting used, the lenders will now make sure that they transfer on to an alternate reference fee in such instances,” he stated.
One other government stated that some lenders on the assembly expressed issue in inserting fallback clauses within the non- performing asset accounts which are referenced to Libor.
“Banks had been later advised to develop a regular working process (SOPs) in case of such accounts for uniform adoption,” he stated, including that the regulator additional identified that some lenders have to replace their web sites the place commerce credit score charges are nonetheless linked to Libor.
An e mail despatched to RBI did not elicit any response until press time.
Fallback clause is basically an settlement on a brand new reference fee if the reference fee within the transaction is now not accessible.
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