MOSCOW, September 26. /TASS/. The Russian government has presented to the State Duma, the lower house of the Russian parliament, a draft law for replacement of the LIBOR [London Interbank Offered Rate-TASS] by a special rate of the Bank of Russia applying to credit institutions in case they failure to perform improvement notices for violations in due time. The document is posted in the electronic database of the legislative assembly’s lower house.

The Bank of Russia uses the LIBOR at present to decide on the maximal size of the interest rate introduced as a cap for the interest rate value set by a credit institution in bank deposit agreements made (renewed) during the effective period of the limitation.

Termination of LIBOR use as the base rate is among the trends of regulation evolvement on financial markets. The draft law stipulates replacement of the LIBOR by a rate computed by the Bank of Russia,.

A similar replacement is stipulated in respect of the key rate of the Bank of Russia to ensure uniformity in applying the mechanism to banking products in different currencies. "Interest rates in rubles, US dollars and euro will be calculated monthly by the Bank of Russia (based on relevant market transactions), covering products with different terms: demand deposits and a broad range of time deposits broken down by periods of money attraction, from 30 days to more than 3 years," according to accompanying papers to the draft law.