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Introduction:
“Collateralized Borrowing and Lending Obligation (CBLO)", a money market instrument as approved by RBI, is a product developed by CCIL for the benefit of the entities who have either been phased out from inter bank call money market or have been given restricted participation in terms of ceiling on call borrowing and lending transactions and who do not have access to the call money market. 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). In order to enable the market participants to borrow and lend funds, CCIL provides the Dealing System through:
- Indian Financial Network (INFINET), a closed user group to the Members of the
Negotiated Dealing System (NDS) who maintain Current account with RBI.
- Internet gateway for other entities who do not maintain Current account with RBI.
What is CBLO?
CBLO is explained as under:
• An obligation by the borrower to return the money borrowed, at a specified
future date;
• An authority to the lender to receive money lent, at a specified future date
with an option/privilege to transfer the authority to another person for value
received;
• An underlying charge on securities held in custody (with CCIL) for the amount
borrowed/lent.
Membership:
Membership to CBLO segment is extended to entities who are RBI- NDS members viz. Nationalized Banks, Private Banks, Foreign Banks, Co-operative Banks, Financial Institutions, Insurance Companies, Mutual Funds, Primary Dealers etc.
Associate Membership to CBLO segment is extended to entities who are not members of RBI- NDS viz. Co-operative Banks, Mutual Funds, Insurance companies, NBFC's, Corporates, Provident/ Pension Funds etc.
Eligible Securities:
Eligible securities are Central Government securities including Treasury Bills,as specified by CCIL from time to time.
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