The Reserve Bank of India (RBI) on February 13, 2026, issued the Draft Lead Bank Scheme.
The following has been stated:
• The draft circular aims to enhance the transparency, reliability, and governance of liquidity benchmarks and interest rate spreads in financial markets. It proposes a consolidated regulatory framework for all market‐based benchmark interest rates (including those used in lending, money markets, and derivative pricing) to ensure they reflect actual market transactions and are resilient to manipulation.
• Under the draft framework, entities contributing to or publishing benchmarks shall adhere to robust governance arrangements, including clear policies on benchmark determination, oversight committees with independent representation, and documented methodologies that are publicly available. Benchmarks shall be based on transactional data to the greatest extent possible, and any reliance on expert judgement where transactions are sparse shall be supported by rigorous internal controls and transparent disclosure.
• The circular also proposes enhanced disclosure requirements, mandating periodic publication of underlying data, methodology changes, and any material events affecting benchmark quality. Entities will be required to establish surveillance and compliance functions to monitor adherence and prevent conflicts of interest. Non-compliance with benchmark governance and transparency standards will attract supervisory attention and possible regulatory action by the RBI.
• Overall, the draft seeks to align India’s liquidity benchmark practices with global best practices (similar to IOSCO’s principles for financial benchmarks) and strengthen the integrity of benchmark rates used across India’s financial system, thereby supporting market confidence and financial stability.
• The last date for submission of comments is March 06, 2026
[Notification no. - FIDD.CO.LBS.BC.No.__/ 02.01.001/2026-27]
