UPSC CSE Prelims
Question 37
With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :
View correct answer and explanation
Correct answer: C
Correct Option: C (Money market)
Explanation: Collateralised Borrowing and Lending Obligation (CBLO) is a short-term collateral-backed borrowing/lending arrangement classified within the money market.
Option-wise Analysis:
A. Incorrect-The bond market deals primarily in tradable debt securities, not CBLO’s short-term funding transactions.
B. Incorrect-Forex trades currencies; CBLO is a domestic money-market mechanism.
C. Correct-CBLO is a collateralised money-market instrument.
D. Incorrect-The equity market trades ownership shares, not collateralised short-term loans.