Context: Recently, State Bank of India (SBI) has executed two inter-bank short term money market deals with pricing linked to SOFR (Secured Overnight Financing Rate).
About Secured Overnight Financing Rate (SOFR)

• SOFR was selected by the Alternative Reference Rates Committee (ARRC) chaired by the New York Federal Reserve in 2017.
• It is a benchmark interest rate for dollar-denominated derivatives and loans.
• It is based on transactions in the Treasury repurchase market.
• Similar to a mortgage rate, SOFR is a secured borrowing rate in the sense that collateral is provided to borrow cash. 
• It is seen as preferable to London interbank offered rate (LIBOR) since it is based on data from observable transactions rather than on estimated borrowing rates.

What is LIBOR?

• London Inter-bank Offered Rate is an average interest rate that is calculated based on estimates provided by the leading banks in London.
• It is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
• It came into use in the 1970s. 
• LIBOR affects both investors and customers. It is used as a reference rate in different types of loans.