C.C.L.I launched a new money market instrument the Collateralised Borrowing and Lending Obligation (C.B.L.O).
It is a variant of liquidity adjustment facility, permitted by RBI. It is a mechanism to borrow and funds aganist security for maturity of 1 day to 1 year.
It is a tripartite Repo transaction involving C.C.I.L as 3rd party which function as intermediatory or common party to borrow as well as lender.
Borrower will be able to repay back even before maturity compared to payment on due date under existing Repo system, C.B.L.O is expected to meet the need of bank's F.I.S,P.Ds,M.Fs,N.B.F.C's and companies for deploying their surplus funds which have phased out of the call money market operations.
C.B.L.O is issued at a discount to face value. Under C.B.L.O securities of borrower will be held in their constituent S.G.L account opened with C.C.I.L and will not be transferred to lender.
C.C.I.L.--Clearing Corporation of India Ltd.
Here for more understanding Repo transaction has been defined:-
Repo transaction is refer to such transaction where banks borrow money from the central bank (RBI) for short period of time by selling their securities (financial assets) to the central bank with an agreement to repurchase it at a future date at predetermined price.
It is a variant of liquidity adjustment facility, permitted by RBI. It is a mechanism to borrow and funds aganist security for maturity of 1 day to 1 year.
It is a tripartite Repo transaction involving C.C.I.L as 3rd party which function as intermediatory or common party to borrow as well as lender.
Borrower will be able to repay back even before maturity compared to payment on due date under existing Repo system, C.B.L.O is expected to meet the need of bank's F.I.S,P.Ds,M.Fs,N.B.F.C's and companies for deploying their surplus funds which have phased out of the call money market operations.
C.B.L.O is issued at a discount to face value. Under C.B.L.O securities of borrower will be held in their constituent S.G.L account opened with C.C.I.L and will not be transferred to lender.
C.C.I.L.--Clearing Corporation of India Ltd.
Here for more understanding Repo transaction has been defined:-
Repo transaction is refer to such transaction where banks borrow money from the central bank (RBI) for short period of time by selling their securities (financial assets) to the central bank with an agreement to repurchase it at a future date at predetermined price.
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