Why RBI withdrew the most popular money market product collateralized borrowing and lending (CBLO)

Shivaprasad Laxman Chhatre | Last updated: 28 December 2023

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The Reserve Bank of India (RBI) withdrew the Collateralised Borrowing and Lending Obligation (CBLO) product due to significant legal and regulatory concerns. Introduced by the Clearing Corporation of India Ltd. (CCIL), CBLO was intended as an interim tool for financial institutions but faced issues regarding its legal backing and potential stamp duty evasion. Despite years of highlighting these defects to RBI and other authorities, the product was only withdrawn after sustained pressure and legal interventions.

Preamble What prompted me to write this lengthy write-up: Big Bang announcement trickled into print media To safeguard investors money from misuse, an ASBA-like facility for trading in secondary markets will be available from January or February, SEBI chief Madhabi Puri Buch said at CII Glo

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About the Author

Shivaprasad Laxman Chhatre

Ex Chief Ethics and Compliance BNP Paribas

Ex Group Head Ethics and Compliance BNP Paribas, Kotak Mahindra Bank, ICICI Bank, PSU Banks, Ex- CEO FIMMDA, Practical ex-Banker 35 years of supervisory level banking experience which includes the experience as Group Head of Compliance of an MNC Bank, 15 years in Bank Treasury amp; Securities Market (in New Private ... Read more

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