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

The correct option is Money market.

What are Collateral Borrowing and Lending Obligations (CBLO)?
Collateral Borrowing and Lending Obligation (CBLO) is a securitized money market instrument that facilitates the borrowing and lending of short-term funds. It was developed by the Clearing Corporation of India Limited (CCIL) and the Reserve Bank of India (RBI) to meet the needs of financial entities who are either not member banks of the call money market or want to borrow or lend funds with collateral security.

Why is CBLO classified under the Money Market?
1. Short-Term Maturity: CBLO is used for short-term liquidity management, with maturities ranging from overnight up to one year, which aligns directly with the defining characteristics of the money market.
2. Collateralized Borrowing: Borrowers must deposit eligible securities (primarily Government Securities) as collateral with the CCIL to borrow funds, which reduces credit risk.
3. Market Access: It allows entities like mutual funds, insurance companies, corporate bodies, and non-banking financial companies (NBFCs)—who are restricted from participating in the inter-bank call money market—to borrow and lend short-term funds easily.

Note: In November 2018, the RBI phased out CBLO and transitioned it to Tri-party Repo (TREPS) to align with international standards, which remains a key instrument in the Indian money market.