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What is Mibor?

What is Mibor?

MIBOR stands acronym for ‘Mumbai Inter- bank Outright Rate’, the benchmark of the Indian call money market. It is the rate at which banks borrow unsecured funds from one another in the inter bank market. The bid rate on how much interest banks would pay to borrow money on a short-term basis from other institutions is known as MIBID (Mumbai Interbank Bid rate).

FBIL polled term Mibor

Negotiated Dealing System – NDS’ is an electronic trading platform, operated by the Reserve Bank of India, used to facilitate the exchange of government securities and other money market instruments. The NDS call system ( will receive the quotes from approved list of  public sector and private sector banks (known as authorized submitter) for various terms (viz.14 days, 1 month, 3 months) between 11 a.m. to 11.15 a.m. on each working day. The authorized submitter submit the quotes with 2 decimals. After receiving the rates, the Mean Rate and Standard Deviation will be computed for each category of rates (viz.14 days,1 month,3 months). A Rate Range will be computed using Mean Rate +/- (3*Standard Deviation) for each category of Rates. Any polled Rate outside the said Range (i.e. Rate higher than Max or lower than Min in their respective categories) will be dropped from Final Rate Calculation. The said calculated numbers will be rounded off to two decimal places at each stage. A minimum of 8 quotes will be required for dissemination of the Term Rate for that term. If minimum quotes are not received the previous day’s rate for that Tenor will be displayed with due notification. If minimum number of quotes not received continuously for the third day, CCIL will not compute the rate for that tenor and notifies the same, the banks in such cases have to follow their own fallback mechanism. The final rate as FBIL polled term Mibor for the day will be released by 11.45 a.m. on FIMMDA and CCIL or other websites as may be notified. The dissemination will be suitably altered whenever the time extended.

FBIL Overnight MIBOR:

 Following the introduction of FBIL Overnight MIBOR, the earlier methodology for calculation of the FIMMDA NSE MIBOR/MIBID rate just like polled term Mibor was revised in July, 2015. The overnight MIBOR is now administered by FBIL (Financial Benchmarks India Ltd.). FBIL is an entity formed by FIMMDA, Foreign Exchange Dealers Association of India (FEDAI) and Indian Banks Association (IBA).

The FBIL overnight MIBOR rate is computed by the Clearing Corporation of India (CCIL) based on trade-weighted inter bank call money transactions on the NDS call platform of CCIL between 9 a.m. and 10 a.m. Therefore, FBIL overnight MIBOR rate is based on the actual traded rates as opposed to polled rates.

At present, MIBOR serves as the key benchmark rate in calculating interest for floating rate notes, corporate debentures, term deposits, interest rate swaps and forward rate agreements. The pricing of overnight indexed swaps, a type of overnight interest rate swap used for hedging interest rate risk  based on overnight MIBOR.

Related article: What is LIBOR?

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