Economy
2024
Banking in India
Monetary Policy
With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of:
B.Forex market
A.Bond market
D.Stock market
C.Money market
Correct Answer: Option C
Collateral Borrowing and Lending Obligations (CBLO) are money market instruments representing an obligation between a borrower and a lender.
CBLO functions similarly to a bond, where the lender buys the CBLO and the borrower sells it with interest. Key characteristics include:
- Negotiable terms.
- Negotiable interest rates.
- Specifics are negotiable between the parties involved.
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.
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