BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Borrowing
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Balance
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Banking
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Basel
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Detailed explanation-1: -A collateralized borrowing and lending obligation (CBLO) is a money market instrument that represents an obligation between a borrower and a lender concerning the terms and conditions of a loan.
Detailed explanation-2: -Maintenance of CRR / SLR on transaction in Collateralised Borrowing and Lending Obligation (CBLO)
Detailed explanation-3: -The uniqueness of CBLO is that lenders and borrowers use collateral for their activities. For example, borrowers of fund have to provide collateral in the form of government securities and lenders will get it while giving loans. There is no such need of a collateral under the call money market.
Detailed explanation-4: -Collateralized Borrowing and Lending Obligation (CBLO) was launched by the Clearing Corporation of India Limited (CCIL) in 2003 to provide liquidity support to non-bank entities, who are restricted to access funds from the Call Money Market.
Detailed explanation-5: -Collateralization is the use of a borrower’s asset to secure a loan. The borrower provides the asset to secure the loan, and if the borrower defaults on the loan, the lender can take possession of the asset and sell it to cover their loss.