With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :
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Answer: C. CBLO (Collateralized Borrowing and Lending Obligation) was a money market instrument run by the Clearing Corporation of India Ltd (CCIL). It let banks and other entities borrow and lend for short periods (one day up to one year) against government securities as collateral. CCIL replaced it with TREPS (tri-party repo) in November 2018.
Watch for: Government securities are used as collateral, which makes students choose the bond market.
Why the other options are wrong
- A. Wrong because CBLO was a short-term borrowing tool, not a bond-trading instrument.
- B. Wrong because CBLO did not involve foreign currency trading.
- D. Wrong because CBLO was not traded on stock exchanges.
Source to check: RBI, Report on Currency and Finance and RBI FAQ on money market instruments; Clearing Corporation of India Ltd (ccilindia.com)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.