TREPS

TREPS (Tri-Party Repo) is a short-term collateralised money market instrument through which mutual funds, banks, and institutional investors lend surplus cash — typically overnight — against collateral (primarily government securities) managed by a neutral third-party agent (the Clearing Corporation of India Limited, or CCIL). In a TREPS transaction, the cash lender (such as a liquid mutual fund with surplus cash) provides funds to the borrower (typically a bank or primary dealer seeking short-term funding) with government securities pledged as collateral — managed and settled seamlessly by CCIL, which validates collateral adequacy and manages the transaction lifecycle. TREPS replaced the earlier CBLO (Collateralised Borrowing and Lending Obligation) system in November 2019. For Indian liquid mutual funds, overnight funds, and ultra short-term debt funds, TREPS forms a critical component of the portfolio — providing daily liquidity management by parking overnight surplus cash at prevailing overnight market rates. TREPS rates closely track the RBI's repo rate, making them a sensitive real-time indicator of short-term money market conditions. For investors in Indian liquid and overnight mutual funds, the fund's TREPS exposure on any given day can be seen in the portfolio disclosure — TREPS is considered one of the safest short-duration investments given its government securities collateral and CCIL guarantee.