With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of:
- Bond market
- Forex market
- Money market
- Stock market
Explanation
Option (c) is correct
- A collateralised borrowing and lending obligation (CBLO) is a money market instrument in India that connects borrowers and lenders for short-term funds. Similar to bonds, CBLOs involve lending and borrowing, but they require collateral, which helps reduce the risk of default. Primarily used to manage short-term liquidity, they are overseen by the Clearing Corporation of India Limited (CCIL) and regulated by the Reserve Bank of India (RBI). The collateral provides security for lenders, making them safer and more reliable in the money market.
