Banking · Risk Management and Government Schemes
Under financial regulations, which statement accurately reflects a key risk related to Tri-Party Repo (TREPS) collateral and the mandatory criteria for auto-renewal of PMJJBY?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Corporate bonds used as TREPS collateral carry zero risk weight, and the PMJJBY premium debit requires a minimum savings account balance of 500 rupees.
- 2Corporate bonds are subject to a higher haircut than Government Securities in TREPS deals due to credit risk, and the PMJJBY auto-debit requires the savings account to be active with sufficient balance.✓
- 3TREPS transactions do not permit corporate bonds as eligible collateral, and the annual PMJJBY premium can be debited in four quarterly installments of 109 rupees.
- 4The Tri-Party Agent (CCIL) fully absorbs all credit risk of corporate bonds in TREPS, and the PMJJBY cover remains valid even if the underlying bank account is closed.
Correct answer
Corporate bonds are subject to a higher haircut than Government Securities in TREPS deals due to credit risk, and the PMJJBY auto-debit requires the savings account to be active with sufficient balance.
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