Simultaneously, measures were taken to develop the market repos and the Collateralised Borrowing and Lending Obligations (CBLO) markets with the Clearing Corporation of India Ltd acting as a central counter party. By August 2005, the non-bank players were phased out of the uncollateralised call money markets, which is now a pure inter-bank market.
The share of the (collateralized) market repo and CBLO segments in the total money market is significant at nearly 90% in recent months. Limit on inter-bank exposures 25. Recognising the possible impact of excessive interconnectedness within the banking system, in March 2007, RBI limited a bank’s inter-bank liabilities (IBL) to twice its net worth.