Views: 39
UPSC Prelims 2024 Question on – CBLO Money Market Instrument
Q. With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of:
✅ Correct Answer: (c) Money market
Explanation:
- CBLO (Collateralized Borrowing and Lending Obligation) is a money market instrument.
- It represents a short-term borrowing and lending arrangement.
- The borrower provides collateral (usually government securities) to obtain funds.
- It ensures low-risk, fully collateralized transactions in financial markets.
- Widely used in India for liquidity management among financial institutions.
