TREASURY BILLSName: P. DenisClass: S.Y.A.FRoll no: 27
Treasury Bills are money market instruments to finance the short term requirements of the Government of India. These are discounted securities and thus are issued at adiscount to face-value. The return to the investor is the difference between the maturityvalue and issue price.
Types Of Treasury Bills:
There are different types of Treasury bills based on thematurity period and utility of the issuance like, ad-hoc Treasury bills, 3 months, 6months and 12months Treasury bills etc. In India, at present, the Treasury Bills areissued for the following tenors 91-days, 182-days and 364-days Treasury bills.
Benefits Of Investment In Treasury Bills
No tax deducted at source.2.
Zero default risk being sovereign paper.3.
Highly liquid money market instrument.4.
Better returns especially in the short term.5.
High degree of tradeability and active secondary market facilitates meetingunplanned fund requirements.
The treasury bills are issued in the form of promissory note in physical form or by credit to Subsidiary General Ledger (SGL) account or Gilt account in dematerialised form.
unt Of Bids
Bids for treasury bills are to be made for a minimumamount of Rs 25000/- only and in multiples thereof.
All entities registered in India like banks, financial institutions, Primary Dealers, firms,companies, corporate bodies, partnership firms, institutions, mutual funds, ForeignInstitutional Investors, State Governments, Provident Funds, trusts, researchorganisations, Nepal Rashtra bank and even individuals are eligible to bid and purchaseTreasury bills.