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What does B stands for in CBLO?

  • A.Bank
  • B.Borrowing
  • C.Basic
  • D.Basel

Answer: B

Correct answer: Borrowing

CBLO was Collateralised Borrowing and Lending Obligation, a money market instrument introduced by CCIL in 2003 for short-term funds against government securities as collateral.

Its purpose was to give entities excluded from the interbank call money market - mutual funds, insurers, corporates - a secured way to lend and borrow overnight. Being collateralised, it carried far less credit risk than call money and came to dominate the segment. It was replaced in 2018 by triparty repo, which serves the same function under a standard repo structure.

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