With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :

The correct answer is Option 3.

Key Points

• Collateral Borrowing and Lending Obligations (CBLO): CBLO is a money market instrument in India that allows entities to borrow and lend funds on a collateralized basis.
• It is a type of short-term borrowing and lending instrument where participants can lend or borrow funds against collateral, typically government securities.Hence, correct answer is Option 3.

Additional Information

• Bond market: The bond market involves the issuance and trading of debt securities, typically long-term instruments such as government bonds, corporate bonds, and municipal bonds.
  • While bonds can be used as collateral in CBLO transactions, CBLO itself is a money market instrument rather than a bond market instrument.
  • The bond market deals with instruments that have a longer maturity compared to the short-term nature of money market instruments like CBLO.
• Forex market: The forex (foreign exchange) market is the global marketplace for trading national currencies against one another.
  • It deals with currency pairs and exchange rates and involves the buying and selling of currencies.
  • CBLO does not pertain to the exchange of foreign currencies or the management of exchange rates, making it unrelated to the forex market.
• Stock market: The stock market is where shares of publicly held companies are issued, bought, and sold.
  • It deals with equity instruments and involves the trading of company stocks.
  • CBLO does not involve equity trading or stock market transactions; instead, it is focused on short-term borrowing and lending within the money market.