The Indian Bank's Association (IBA) will be writing to Reserve Bank of India raising issues on the difficulties faced on hedging bonds in the current market, pointing the shallowness of the Overnight Index Swap (OIS) market.

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Sources told CNBC-TV18 that the IBA will also argue that most bonds issued by the government are long tenor bonds and will request the Centre and the state governments to issue more floaters.

They will also request the central bank to encourage use of Indian Bench Mark (INBMK) benchmark for hedging.

On the market front, the market was betting on some mark-to-market relief for banks on bonds.

First Published:Mar 15, 2018 3:50 AM IST