Government Securities and Treasury Bills

Government Securities (G-Secs)

The Government securities comprise dated securities issued by the Government of India and state governments with tenor beyond one year. At present, there are Central Government dated securities with a tenor up to 30 years in the market.

  • Subscriptions can be for a minimum amount of Rs.10,000 and in multiples of Rs.10,000

State Government Securities are securities issued by the state governments and are also known as State Development Loans (SDLs).

  • The tenor of state government securities is normally ten years.
  • State government securities are available for a minimum amount of Rs.10,000 and in multiples of Rs.10,000.
  • These are available at a fixed coupon rate.

Treasury bills (T-bills)

Treasury bill is a monetary policy instrument through which government raise funds for short period requirements and commercial banks invest their short period surpluses by buying these bills from government.

  • Treasury bills are issued at a discount and are redeemed at par.
  • While 91-day T-bills are auctioned every week on Wednesdays, 182-day and 364-day T-bills are auctioned every alternate week on Wednesdays.
  • Treasury bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000.
  • There are no treasury bills issued by State Governments.

T-bills and G-Sec auctions are held on the Negotiated Dealing System (NDS) and the members electronically submit their bids on the system

Types of T-bills

Generally, there are three types of treasury bills:

  • 91 days Treasury bill;
  • 182 days Treasury bill; and
  • 364 days Treasury bills.

T-bill can be issued for 14 days, but in India generally securities above three maturities are issued.

Auctions of all these securities are managed and serviced by the Reserve Bank of India.

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