Treasury bills (T-bills)

Current Context : The government plans to borrow ₹3.94 lakh crore through T-Bills in the fiscal year 2024-25.

About T-Bills :

• T-Bills are short-term debt instruments issued by the Government of India to meet its short-term funding needs.
• Issuer: Issued by the Reserve Bank of India (RBI) through an auction on its E-Kuber platform.
• Tenure: T-Bills are issued in three tenors: 91 days, 182 days, and 364 days.
• Zero-Coupon: They are zero-coupon securities, issued at a discount and redeemed at face value upon maturity.
• Participants: Major participants include commercial banks, primary dealers, insurance companies, mutual funds, co-operative banks, and retail investors.
• Liquidity: Considered low-risk and highly liquid investment options.

NOTE: In India, the Central Government issues both T-Bills and bonds or dated securities while the State Governments issue only bonds or dated securities, called the State Development Loans (SDLs).