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PRESENTED BY

:

NAMINDRA AWASTHI
MBA-FC(SEMESTER III)

ƒ .) and approved by RBI.Collateralised Borrowing and Lending Obligation abbreviated as CBLO. ƒ It is developed by CCIL(Clearing Corporation of India Ltd. was announced by RBI in the year 2002-03 as a money market instrument.

It was developed for the benefit of the entities who have been phased out from inter bank call money market been given restricted participation in terms of ceiling on call borrowing and lending transactions  do not have access to the call money market.   .

.ƒ CBLO is a discounted instrument available in electronic book entry form for the maturity period ranging from one day to ninety days (can be made available up to one year as per RBI guidelines).

which functions as intermediary or common counter party to borrower as well as lender. ƒ . It is a tripartite transaction (like repo) involving CCIL as 3rd party.ƒ CBLO is a type of derivative debt instrument. securitised by approved bonds lodged with the CCIL through Subsidiary General Account.

Authority to the lender to receive money lent. Underlying charge on securities held in custody (with CCIL) for the amount borrowed/lent. at a specified future date. at a specified future date.ƒ ƒ ƒ Obligations by the borrower to return the money borrowed. .

-li atc i syst r vi y I s as t a l rs t rr a l funds a ainst under sc eme. ƒ . rr ers submit t eir ` ffers enders submit t eir `bids (s ecifying t e disc unt rate and maturity eri d).ƒ Aut at r r riv .

The net liabilities and receivables for each artici ant are settled at the end of the day. ƒ . Through a clearing arrangement. allowing. for negotiations. These rders are matched n the basis f the best quotations. of course.ƒ The bids/ ffers ill be thr ugh an aucti n screen called `aucti n market'.

.ƒ ƒ ƒ ƒ ƒ ƒ ƒ ƒ Banks Financial Institutions Insurance Companies Mutual Funds Primary Dealers NBFCs Non-Government Provident Funds Corporates etc.

Screen based trading provides transparency in operations.ƒ ƒ ƒ ƒ Due to. tendency to earn arbitrage profits. It is secure and freely collateralized. . It is immediately cashable.

ƒ ƒ The yeild of CBLO is comparatively lower as compared to call money market. . The rate of interest in the CBLO is normally lower than in the call money market.