Recently, the Indian financial market has undergone huge technological advancement with a view to bring some fundamental changes in the financial market in the form of the ability to shift not only the funds from one place to the other but also from one market to the other and taking their positions in various segments of financial market say like CCIL, NDS, RTGS system, Centralized Funds Management System (CFMS) and Electronic Clearing System (ECS).
Winds of change are blowing in the Indian money markets. India's financial markets have undergone rapid changes since the country embarked on a program of economic reforms in 1991. They have embraced technology, seen a substantial increase in the variety and volume of capital market as well as money market transactions and witnessed the emergence of new products like derivatives as important instruments in financial intermediation. Developments like the decision of Reserve Bank of India (RBI) to convert call money market in to `pure inter-bank market' by phasing out non-banking entities, introduction of Real Time Gross Settlement (RTGS) and Negotiated Dealing System (NDS) have transformed money markets.
These developments have necessitated the design of new products to cater to short-term liquidity and cash management needs of market players. Collateralized Borrowing and Lending Obligation (CBLO) is one such innovative product developed by CCIL (Clearing Corporation of India Limited), as a money market instrument. RBI, in its Mid-Term Review of Monetary and Credit Policy for the year 2002-03, announced the introduction of CBLO and subsequently issued detailed operative guidelines for the product. The product designed by CCIL is in the nature of Tripartite Repo available in international markets adapted to suit the needs of Indian markets such as facilitating liquidity and cash management. |
