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Treasury Bills

About Treasury Bills

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What are Treasury Bills?

When the government goes to the financial market to raise money, it does so by issuing two types of debt instruments — treasury bills and government bonds. Treasury bills are issued when the government needs money for a short period. These bills are issued only by the central government, and the interest on them is determined by market forces.
 
What are maturity period of treasury bills?
 
Treasury bills, or T-bills, have a maximum maturity period of 364 days. So, they are categorised as money market instruments (money market deals with funds with a maturity of less than one year). At present, treasury bills are issued in three maturities — 91-day, 182-day and 364-day. In 1997 the government also issued 14-day immediate treasury bills.
 
When were treasury bills introduced? Who issues treasury bills and who can buy?
 
Treasury bills were first issued in India in 1917. They are issued via auctions conducted by the Reserve Bank of India (RBI) at regular intervals. Individuals, trusts, institutions and banks can purchase T-Bills. But they are usually held by financial institutions. They have a very important role in the financial market beyond investment instruments. Banks give treasury bills to the RBI to get money under repo. Similarly, they can also keep it to fulfil their Statutory Liquid Ratio (SLR) requirements.
 
How do T-bills work?
 
Treasury bills are issued at a discount to original value and the buyer gets the original value upon maturity. For example, a Rs 100 treasury bill can be availed of at Rs 95, but the buyer is paid Rs 100 on the maturity date. The return on treasury bill depends on liquidity position in the economy. When there is a liquidity crisis, the returns are higher, and vice versa.
 
Are T-bills a safe investment instrument?
 
Treasury bills have an advantage over other market instruments because of the zero-risk weightage associated with them. The secondary market of T-Bills is very active and they have a higher degree of tradability.

Latest Updates on Treasury Bills

The opposition-controlled parliament last month cut 4.1 trillion won from the government's proposed 677.4 trillion won ($473 billion) budget

Updated On: 10 Dec 2024 | 9:56 AM IST

On coming to power in July for the first time in 14 years, the government described its economic inheritance from the former Conservative administration as the bleakest in decades, requiring

Updated On: 15 Nov 2024 | 4:21 PM IST

Following the talks, India today granted Maldives a USD100 million Treasury bills roll over, in addition to both sides inking a USD 400 million and Rs 3,000 crore currency swap agreement

Updated On: 07 Oct 2024 | 4:39 PM IST

US bond yields rose, as traders booked profits after a recent fall, and as yields witnessed a floor. However, the possibility that the Fed could do another outsized rate cut remain intact

Updated On: 26 Sep 2024 | 10:24 AM IST

May borrow around Rs 6.3 trillion during the period

Updated On: 23 Sep 2024 | 11:06 PM IST

UCO Bank reduces T-bill benchmark linked rates

Updated On: 09 Aug 2024 | 8:48 PM IST

After unshackling the economy from three years of Covid-19 restrictions, Chinese officials had hoped that stimulating the industrial sector would stabilise the job market

Updated On: 26 Jul 2024 | 10:21 PM IST

States and Union Territories also plan to borrow up to Rs 2.63 trillion through state government securities over the same period

Updated On: 28 Jun 2024 | 9:06 PM IST

The NDA government has disclosed off-Budget funded schemes in the Budget documents from FY22

Updated On: 27 May 2024 | 11:18 PM IST

The 7.18 per cent 2033 bond yield is expected to trade between 7.05 per cent and 7.10 per cent, after ending at 7.0925 per cent, a trader with a state-run bank said

Updated On: 21 May 2024 | 10:20 AM IST

The yield spread narrowed to -0.61 per cent on Monday, a stark contrast to 0.99 per cent a year ago and the 20-year average spread of 2 per cent

Updated On: 23 Apr 2024 | 12:05 AM IST

A US Treasury Department statement and South Korea's foreign ministry said the action was taken in coordination between the two countries

Updated On: 28 Mar 2024 | 8:02 AM IST

Equities have dominated bonds, while bonds have outperformed treasury bills

Updated On: 28 Feb 2024 | 11:04 PM IST

The banking system's liquidity primarily stayed in deficit during the third quarter of the current financial year and it widened further in January, driven by tax outflows

Updated On: 24 Jan 2024 | 8:28 PM IST

The proposals would require the industry to meet some costs associated with the bank failures rather than the taxpayer, Britain's Treasury said

Updated On: 11 Jan 2024 | 5:09 PM IST

The widening of the spread on state-government paper over central government bonds may work as a dampener, according to treasury executives

Updated On: 02 Jan 2024 | 9:45 PM IST

The Reserve Bank of India set the cut-off yield on 91-day, 182-day, and 364-day T-bill at 6.92 per cent, 7.11 per cent, and 7.15 per cent respectively

Updated On: 08 Nov 2023 | 9:51 PM IST

The Reserve Bank of India set the cut-off yield on 91-day, 182-day and 364-day T-bill at 6.93 per cent, 7.14 per cent and 7.16 per cent respectively

Updated On: 25 Oct 2023 | 10:54 PM IST

Total subscriptions in the primary market surged to Rs 2,736 crore on September 18, from Rs 1,809 crore on April 3

Updated On: 20 Sep 2023 | 5:34 PM IST

T-Bill returns attractive than bank FDs

Updated On: 19 Sep 2023 | 7:15 PM IST