Treasury Bills

Treasury Bills Latest News

India recently extended financial support to the Maldives by renewing a USD 50 million Treasury Bill for another year through the State Bank of India (SBI).

About Treasury Bills

• A T-Bill is a short-term debt instrument issued by the Indian government through the Reserve Bank of India (RBI). 
• Purpose: 
  • The primary objective of a T-Bill is to meet the short-term financial requirements of the central government.
  • RBI also issues such treasury bills under its open market operations (OMO) strategy to regulate its inflation level and spending/borrowing habits of individuals. 
  • For investors, they present one of the safest investments with the highest liquidity among government securities. 
• Features: 
  • T-Bills are zero coupon securities, meaning they don’t pay interest. 
  • Instead, they are issued at a discount and redeemed at the face valueat maturity. For example, a 91 day Treasury bill of ₹100/- (face value) may be issued at say ₹ 98.
  • The return to the investors is the difference between the maturity value or the face value and the issue price.
  • Tenure: T-Bills are issued in India with tenures of 91 days, 182 days, 364 days. 
  • Minimum Investment: ₹25000 or multiples of this amount.
• Issue Process:
  • T-bills are issued through an auction conducted by the RBI at regular intervals. 
  • The auctions are held at RBI’s electronic platform called E-Kuber.
  • Who can buy T-Bills? 
  • T-bills can be purchased by any entity registered in India, such as banks, financial institutions, primary dealers, corporate bodies, institutions, mutual funds, state governments, trusts and even individuals in both primary as well as secondary markets.

Treasury Bills FAQs

Q1: What is the treasury bill?

Ans: A T-Bill is a short-term debt instrument issued by the Indian government through the RBI.

Q2: Is T Bill a good investment?

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Ans: For investors, T-Bills present one of the safest investments with the highest liquidity among government securities. 

Q3: What is the primary purpose of issuing Treasury Bills (T-Bills)?

Ans: To meet short-term financial requirements of the government.

Source: TOI