WHAT IS CCIL?

The Clearing Corporation of India Limited (CCIL) is a pivotal institution in India's financial infrastructure, established in April 2001 to provide efficient clearing and settlement services across various financial markets. Recognized as a Qualified Central Counterparty (QCCP) by the Reserve Bank of India (RBI) in 2014, CCIL plays a critical role in ensuring the stability and integrity of the Indian financial system.

BASIC DETAILS

• Established: 2001
• Regulator: RBI (Reserve Bank of India)
• Ownership: Jointly owned by major banks, financial institutions, and RBI
• Headquarters: Mumbai

Core Functions of CCIL

1. Central Counterparty (CCP) Services: CCIL acts as an intermediary between buyers and sellers in financial transactions, becoming the counterparty to both sides. This mechanism mitigates counterparty risk by ensuring that the failure of one party does not affect the completion of the transaction.
2. Clearing and Settlement: It provides guaranteed clearing and settlement services for various financial instruments, including Government Securities (G-Secs): Facilitates the settlement of outright and repo transactions in G-Secs.
3. Money Market Instruments: Handles instruments like Commercial Papers (CPs), Certificates of Deposit (CDs), and interbank call money.
4. Foreign Exchange (Forex) Transactions: Manages the clearing and settlement of USD/INR spot, forward, and swap transactions.
5. Derivatives: Covers interest rate swaps, forward rate agreements, and other OTC derivatives.
6. Risk Management: CCIL employs robust risk management practices, including margining, collateral management, and default fund mechanisms, to safeguard against potential defaults and systemic risks.
7. Trade Repository: It operates trade repositories for OTC derivatives, collecting and maintaining data on interest rate, credit, and forex derivatives, thereby enhancing transparency and regulatory oversight.
8. Portfolio Compression Services: CCIL offers portfolio compression services for OTC derivatives, allowing market participants to reduce the notional amount of outstanding contracts, thereby lowering counterparty exposure and capital requirements.
9. Data Services: Provides comprehensive data and analytics related to settlement activities and market trends, aiding in informed decision-making for market participants and regulators.

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