Collateral Borrowing & Lending Obligations
Question
With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of:
Options
Bond market
Forex market
Money market
Stock market.
Explanation
Collateralized Borrowing and Lending Obligations (CBLO) were short-term financial instruments (now replaced by TREPS) used for borrowing and lending funds overnight or for short durations, backed by government securities. Because they deal with short-term borrowing (less than one year), they strictly belong to the money market.
Answer: (c).
Question details
Year
2024
Paper
GS Paper 1
Question
Q40
Subject
Economy
Sub-topic
Financial Markets & Instruments
Type
Factual single
Difficulty
Hard
Nature
Static
Source hint
RBI Money Market Instruments / TREPS & CBLO Framework
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