UPSC Prelims 2024 · Question 100 of 97
UPSC Prelims 2024 question on Collateral Borrowing Lending Obligations
- ExamUPSC CSE
- Year2024
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicMoney Market
- DifficultyMedium
- TypeDirect
With reference to the Indian economy, 'Collateral Borrowing and Lending Obligations' are the instruments of:
Show answer
Answer: C. Money market
Verdict
Correct answer: Money market → Option (c).
Analysis
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).