Explanation

Collateralized Borrowing and Lending Obligation (CBLO) was a money market instrument developed by the Clearing Corporation of India Ltd. (CCIL) and the Reserve Bank of India (RBI) to facilitate short-term liquidity management against government securities as collateral:

• (a) Bond market (Incorrect): The bond market deals with long-term debt securities issued by governments or corporations, whereas CBLO operates strictly within the short-term wholesale segment.

• (b) Forex market (Incorrect): The foreign exchange market facilitates the buying, selling, and conversion of foreign currencies, unrelated to domestic sovereign-collateralized lending.

• (c) Money market (Correct): CBLO functioned as an essential money market instrument allowing entities—especially non-bank financial institutions and mutual funds barred from the call money market—to borrow and lend funds for short tenures (overnight up to one year) against central government securities. *Note: CBLO was later transitioned to the Tri-party Repo (TREPS) mechanism.*

• (d) Stock market (Incorrect): The stock market facilitates secondary trading of equity shares and related derivative instruments, not short-term debt and liquidity operations.

Hence, Option (c) is the correct answer.