Treasury Bills

What are Treasury Bills?

Treasury Bills are money market instruments offered to finance short term debt obligation of the Government of India. These short-term instruments aid in plugging in the short-term liquidity mismatches of the Central Government. In simple words, it acts as the working capital of the Central Government.

What is the tenor of Treasury Bills?

Treasury Bills, or T-Bills as they are colloquially called, are generally issued for a tenor of 91 Days, 182 Days and 364 Days.

How are the Treasury Bills issued and redeemed?

Treasury Bills are discounted instruments i.e. they are issued at a discount to par value. These are issued through the auction process and the Market Stabilisation Scheme. Just as in case of dated G-Secs and SDLs, non-competitive bidding is allowed in Treasury Bills. However, participation in the same is restricted only to State Governments, eligible Provident Funds, select foreign central banks and is not available to the co-operative banks for proprietary bids. Also, in case of Treasury Bills, the amount accepted for non-competitive bids is over and above the notified amount and no limit has been placed on the maximum amount that can be bid under this facility.

On maturity, Treasury Bills are redeemed at par value, with the difference between the discounted rate (at the time issuance) and maturity value being the return earned on such investments. The minimum amount in which they can be traded is ₹ 25,000.

How are the Treasury Bills trades settled?

The trading and settlement mechanism for Treasury Bills transactions is similar to those for Dated G-Secs and SDLs.

Can Treasury Bills be used as Collateral?

Yes, Treasury Bills qualify as an SLR investment and can also be used as collateral in repo transactions.

Contact Us:

Clients interested buying/selling Treasury Bills may contact our Sales Personnel on 022-66202224/25/28. We endeavour to provide the best possible returns to our clients, keeping in line with their overall investment objectives.