GOVERNMENT

SECURITIES

BY – HARSH PATIL

SY BAF

ROLL NO. 578

 INTRODUCTION
A Government security is tradable instrument issued by Central
Government or the State Government. It acknowledeges the
Government’s debt obligation. Such securities are issued for short term
or long term. Government needs large amount to carry on its welfare
activites.
 MEANING
• A Government security is a bond or other type of debt
obligation that is issued by a Government with a promise of
repayment upon the securitiy’s maturity date.
• Government securities are usually considered low-risk
investments because they are backed by the taxing power of a
Government.
 OBJECTIVES
• Government securities are sovereign debt obligations of Government of India
either Central or any authority of Government.
• Government securities includes Central Government & State Government
securities, Treasury Bill & Government guaranteed bonds.
• The term of Government securities range from 92 days to 30 years.
 WHY YHEY ARE ISSUED?
Government securities are mainly issued for two different reasons.

 The primary reason that the most government securities are issued is to
raise funds for government expenditures.
 Secondary reason is to control the supply of money in an economy.
TYPES OF GOVERNMENT SECURITIES
TREASURY BILLS(T – BILLS)
• Treasury bills or T – bills, are short term money market instrument issued
by Government of India.
• Treasury bills are zero coupon securities and pay no interest.
CASH MANAGEMENT BILLS(CMBs)
Government of India, in consultation with RBI , has decided to issue new
short term instrument, known as Cash Management Bills, to meet the
temporary mismatches in the cash flow of the Government.
 TYPES OF GOVERNMENT SECURITIES
DATED GOVERNMENT SECURITIES
• Dated Government Securities are long term securities and carry a fixed or floating
coupon(interest rate) which is paid on the face value, payable at fixed time
periods(usually half-yearly).
• Most of Dated securities are Fixed coupon securities.

STATE DEVLOPMENT LOANS(SDLs)

• State Development Loans (SDLs) are dated securities issued by states for meeting
their market borrowings requirements.
• Purpose of issuing State Development Loans is to meet the budgetary needs of
state governments. 
HARSH PATIL
S.Y BAF
ROLL NO.578