PRESENTED BY

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NAMINDRA AWASTHI
MBA-FC(SEMESTER III)

ƒ .Collateralised Borrowing and Lending Obligation abbreviated as CBLO. ƒ It is developed by CCIL(Clearing Corporation of India Ltd.) and approved by RBI. 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). .

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

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

-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 Aut at r r riv . rr ers submit t eir ` ffers enders submit t eir `bids (s ecifying t e disc unt rate and maturity eri d). ƒ .

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

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

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

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

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