Mumbai Inter-Bank Operating Rate (MIBOR) is modelled after the more famous London InterBank Overnight Rate (LIBOR). It is the overnight lending offered rate for Indian commercial banks.
The Mumbai Interbank Offer Rate (MIBOR) is India’s interbank rate, which is the interest rate charged by a bank on a short-term loan to another bank.

The MIBOR was created on June 15, 1998, by the Committee for the Development of the Debt Market, as an overnight rate. The NSEIL launched the 14-day MIBOR on November 10, 1998, and the one-month and three-month MIBORs on December 1, 1998.


  • MIBOR is calculated based on input from a panel of 30 banks and primary dealers.
  • MIBOR rates have been used as benchmark rates for the majority of money market deals made in India.
  • MIBOR is calculated every day by the National Stock Exchange of India (NSEIL) as a weighted average of lending rates of a group of major banks throughout India, on funds lent to first-class borrowers.

Mumbai Interbank Bid Rate (MIBID)

  • MIBID is the rate at which banks would like to borrow from other banks and MIBOR is the rate at which banks are willing to lend to other banks.
  • The National Stock Exchange (NSE) developed and published the Mumbai Interbank Bid Rate (MIBID).
  • The Mumbai Interbank Bid Rate is a benchmark interest rate calculated as a weighted average of rates offered for large bank deposits by other banks in India.
  • MIBID is paired with a corresponding interbank offer rate for short-term loans between Indian banks, MIBOR.
  • MIBID was founded as the Indian overnight call money market.

Mumbai Interbank Forward Offer Rate (MIFOR)

  • The Mumbai Interbank Forward Offer Rate is the rate that Indian banks use as a benchmark for setting prices on forward-rate agreements and derivatives.
  • MIFOR is a mix of the London Interbank Offered Rate and a forward premium derived from Indian forex markets. The Reserve Bank of India discontinued the use of MIFOR following the rate-fixing scandal involving LIBOR, which is used as a reference rate.
  • Adjusted and modified MIFOR rates are published on a daily basis by Financial Benchmarks India Pvt. Ltd.
  • MIFOR is a benchmark for setting derivatives rates in India. It brings an element of currency exchange into the mix. This benchmark is configured by including the U.S. dollar overnight LIBOR rate published at 11:00 a.m. London time every day.

Utility of MIFOR

  • The benchmark also includes the swap points of a currency swap between the U.S. dollar (USD) and Indian rupee (INR) of the same maturity. That’s because banks pay LIBOR to borrow dollars in the interbank market and get rupees via the currency swap.
  • Rates were published by India’s central bank, the Reserve Bank of India (RBI) to help investors so they wouldn’t have to calculate the swap points, which is the interest rate differential between the U.S. and India for a particular settlement date such as one month, two months, and so on.

Disadvantages of MIFOR

  • Limited Coverage: MIFOR is primarily focused on the Indian financial market, specifically for pricing and settling offshore rupee derivatives. This limited coverage means it may not accurately represent the broader market conditions or the interest rate expectations of other economies.
  • Lack of Transparency: The calculation methodology and underlying data used to determine MIFOR rates may not be transparent to market participants. This lack of transparency can create uncertainty and make it challenging to assess the accuracy and reliability of the benchmark.
  • Vulnerability to Manipulation: Like any benchmark rate, MIFOR is vulnerable to potential manipulation. If there are insufficient safeguards or oversight mechanisms in place, market participants could potentially collude or engage in unethical practices to manipulate the MIFOR rates for their own benefit.
  • Reliance on Panel Banks: MIFOR rates are derived from submissions provided by a panel of participating banks. The accuracy and integrity of the benchmark depend on the honesty and accuracy of these submissions. If there are concerns about the reliability or credibility of these panel banks, it can undermine the trust in MIFOR as a benchmark rate.
  • Limited Tenors: MIFOR rates are typically available for a limited range of tenors, usually up to one year. This limitation can be a disadvantage for market participants who require longer-term interest rate benchmarks or want to hedge risks beyond the available tenors.

Current Status

The RBI continues to allow contracts referencing MIFOR after Dec. 31, 2021, just “for the purpose of managing risks arising out of LIBOR/MIFOR referenced contracts undertaken on or before December 31, 2021.

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