InvestorQ : Can you explain what a treasury bill (T-bills) is and what is their purpose?
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Can you explain what a treasury bill (T-bills) is and what is their purpose?

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Dhwani Mehta answered.
1 year ago
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Treasury bills are actually a class of Central Government Securities. Treasury bills, commonly referred to as T-Bills are issued by Government of India against their short term borrowing requirements with maturities ranging between 14 to 364 days. The T-Bill of below mentioned periods are currently issued by Government/Reserve Bank of India in Primary Market 91-day and 364-day T-Bills. All these are issued at a discount-to-face value. For example a Treasury bill of Rs. 100.00 face value issued for Rs. 91.50 gets redeemed at the end of its tenure at Rs. 100.00. 91 days T-Bills are auctioned under uniform price auction method where as 364 days T-Bills are auctioned on the basis of multiple price auction method.

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