Economics • Banking & FinanceMedium
What distinguishes 'Treasury Bills' from other government securities issued in the Indian money market?
A. They are long-term debt instruments carrying a fixed coupon rate paid semi-annually
B. They are zero-coupon instruments issued at a discount and redeemed at face value by the central bank✓ Correct Answer
C. They are issued exclusively by commercial banks to meet immediate interbank borrowing needs
D. They are traded only on recognized stock exchanges through registered retail brokers
💡 Solution & Explanation
Treasury bills are short-term money market instruments issued by the Reserve Bank of India on behalf of the central government at a discount to their face value, with no explicit interest coupon. Currently, they are issued in tenors of 91 days, 182 days, and 364 days. Dated government securities represent long-term borrowings and carry regular coupon interest payments.
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