With reference to the Indian economy, Collateral Borrowing and Lending Obligations are the instrumen

Question

With reference to the Indian economy, Collateral Borrowing and Lending Obligations are the instruments of:

Accepted Answer

Collateral Borrowing and Lending Obligations (CBLO) is a money market instrument that represents an obligation between a borrower and a lender. The instrument works like a bond where the lender buys the CBLO and a borrower sells the money market instrument with interest. The term, the interest rate, and the specifics of the CBLO are often all negotiable between the two parties. In India, CBLOs are operated by the Clearing Corporation of India Ltd. (CCIL) and the Reserve Bank of India (RBI). Hence option (c) is the correct answer.