{"id":17661,"date":"2023-12-02T04:52:14","date_gmt":"2023-12-01T23:22:14","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=17661"},"modified":"2025-04-05T05:47:42","modified_gmt":"2025-04-05T00:17:42","slug":"ccil","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/ccil\/","title":{"rendered":"Clearing Corporation of India Limited (CCIL)"},"content":{"rendered":"<h2>About Clearing Corporation of India Limited (CCIL)<\/h2>\n<ul>\n<li>It was set up in April, 2001 to\u00a0provide guaranteed clearing and settlement functions\u00a0for\u00a0transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.<\/li>\n<li>CCIL also provides non-guaranteed settlement\u00a0for Rupee interest rate derivatives\u00a0and cross-currency transactions through the\u00a0CLS Bank.<\/li>\n<li>Promoters:\u00a0State Bank of India,\u00a0IDBI Bank Ltd,\u00a0ICICI Bank Ltd, Life Insurance Corporation of India (LIC),\u00a0Bank of Baroda and\u00a0HDFC Bank Ltd.<\/li>\n<li>The Company was incorporated with an authorized equity share capital of Rs. 50 Crores.<\/li>\n<li>CCIL\u2019s adherence to the stringent principles governing its operations as a Financial Market Infrastructure (FMI) has resulted in its\u00a0recognition as a Qualified Central Counterparty (QCCP) by the Reserve Bank of India in 2014.<\/li>\n<li>It has also\u00a0set up a Trade Repository to enable financial institutions to report their\u00a0transactions in Over-the-Counter (OTC) derivatives.<\/li>\n<li>Through\u00a0its fully owned subsidiary, Clearcorp Dealing Systems Limited (CDSL), CCIL has\u00a0introduced various platforms for electronic execution of deals in various market segments.<\/li>\n<li>Further, CDSL has\u00a0developed, implemented, and manages the NDS-OM, the\u00a0RBI-owned anonymous electronic trading system for dealing in G-Secs and\u00a0also for reporting OTC deals, as well as the\u00a0NDS-CALL platform, which\u00a0facilitates electronic dealing in the Call, Notice &amp; Term Money market.<\/li>\n<li>CCIL is\u00a0also the trade repository for all OTC transactions\u00a0in the\u00a0Forex, Interest Rate and Credit derivative\u00a0transactions.<\/li>\n<\/ul>\n<h2>What is CLS?<\/h2>\n<ul>\n<li>Continuous Linked Settlement (CLS) is an\u00a0initiative by a consortium of the\u00a0world\u2019s largest foreign exchange clearing banks\u00a0to\u00a0eliminate the\u00a0settlement risk in foreign exchange\u00a0transactions.\u00a0<\/li>\n<li>The CLS system is\u00a0run by CLS Bank International, which is solely dedicated to settling foreign exchange trades.<\/li>\n<li>The CLS Bank was established in 2002 and is\u00a0owned by the world\u2019s largest banks. It is\u00a0based in New York, with its\u00a0main operations in London.<\/li>\n<li>Working:\n<ul>\n<li>Standard foreign exchange transactions involve a settlement risk. As the\u00a0exchange of the two currencies involved is not simultaneous, the\u00a0party that sells a currency\u00a0before receiving the currency purchased from the counterparty\u00a0is\u00a0exposed to a certain risk.<\/li>\n<li>CLS removes settlement risk by\u00a0using a payment-versus-payment mechanism (\u201cPVP\u201d). This means that\u00a0you get paid only if you pay.<\/li>\n<li>On settlement day,\u00a0each counterparty\u00a0to the trade\u00a0pays to CLS the currency it is selling.<\/li>\n<li>CLS pays out the bought currency only if the sold currency is received.<\/li>\n<li>In effect, CLS\u00a0acts as a trusted third party in the settlement process.<\/li>\n<li>It\u2019s important to note that CLS is\u00a0not a central counterparty; the\u00a0trade remains between the two counterparties.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>What Is an Over-the-Counter (OTC) Derivative?<\/h2>\n<ul>\n<li>A derivative is a\u00a0security with a price that is\u00a0dependent on or derived from\u00a0one or more underlying assets.\u00a0<\/li>\n<li>Its\u00a0value\u00a0is determined by fluctuations\u00a0in the\u00a0underlying asset.<\/li>\n<li>The most common\u00a0underlying assets include stocks, bonds, commodities, currencies, interest rates, and market indexes.<\/li>\n<li>Depending on where derivatives trade, they can be\u00a0classified as over-the-counter or exchange-traded (listed).<\/li>\n<li>An\u00a0OTC derivative is a financial contract that\u00a0is arranged between two counterparties but\u00a0with minimal intermediation or regulation.<\/li>\n<li>OTC derivatives\u00a0do not have standardized terms, and they are\u00a0not listed on an asset exchange.<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What are Government Securities (G-Secs)?<\/h3>\n<p>Government Securities, popularly known as G-Sec Bonds, are debt instruments issued by the Central government to meet its fiscal needs.Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more). In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/www.newindianexpress.com\/business\/2023\/dec\/02\/rbi-boe-end-deadlock-over-clearing-corporation-2638059.html\" target=\"_blank\" rel=\"nofollow noopener\"><u>RBI, BoE end deadlock over clearing corporation<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Clearing Corporation of India Limited provides guaranteed clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.<\/p>\n","protected":false},"author":5,"featured_media":17662,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-17661","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/17661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=17661"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/17661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/17662"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=17661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=17661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=17661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}