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CBLO

CCIL launched Collateralised Borrowing and Lending Obligations (CBLO), a new money market instrument that allows borrowing and lending funds against securities for periods between 1 day and 1 year. CBLO acts as an intermediary between borrowers and lenders, with the borrower's securities held in their account at CCIL rather than being transferred to the lender. This system provides more flexibility than existing repo transactions by allowing early repayment by borrowers. CBLO is expected to help banks, financial institutions, and companies deploy surplus funds previously used in call money markets.

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42 views

CBLO

CCIL launched Collateralised Borrowing and Lending Obligations (CBLO), a new money market instrument that allows borrowing and lending funds against securities for periods between 1 day and 1 year. CBLO acts as an intermediary between borrowers and lenders, with the borrower's securities held in their account at CCIL rather than being transferred to the lender. This system provides more flexibility than existing repo transactions by allowing early repayment by borrowers. CBLO is expected to help banks, financial institutions, and companies deploy surplus funds previously used in call money markets.

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scribd_1008
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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COLLATERALISED BORROWING & LENDING OBLIGATION (CBLO)

CCIL launched a new money market instrument, the Collateralised Borrowing and Lending Obligation (CBLO). It is a variant of liquidity adjustment facility, permitted by RBI. It is a mechanism to borrow and lend funds against securities for maturities of 1 day to 1 year. It is a tripartite repo transaction involving CCIL as 3rd party, which functions as intermediary or common counter party to borrower as well as lender. Borrower will be able to repay back even before maturity, compared to payment on due date under the existing Repo system. CBLO is expected to meet the needs of banks, FIs, PDs, MFs, NBFCs and companies for deploying their surplus funds, which have been phased out of the call money market operations. CBLO is issued at a discount to face value. Under CBLO, securities of borrower will be held in their constituent SGL account opened with CCIL and will not be transferred to lender.

CCIL Clearing Corporation of India

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