General calculation for yield on T-Bill..
| Treasury Bills India |
| • Treasury Bills are short term (up to one year) borrowing instruments of the Government of India which enable investors to park their short term surplus funds while reducing their market risk. • They are auctioned by Reserve Bank of India at regular intervals and issued at a discount to face value. On maturity the face value is paid to the holder. • The rate of discount and the corresponding issue prices are determined at each auction. When liquidity is tight in the economy, returns on Treasury Bills sometimes become even higher than returns on bank deposits of similar maturity. • Any person in India including Individuals, Firms, Companies, Corporate bodies, Trusts and Institutions can purchase Treasury Bills. Treasury Bills are eligible securities for SLR purposes. • Treasury Bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000 thereafter. They are available in both Primary and Secondary market. • Treasury Bills are issued in the form of SGL - entries in the books of Reserve Bank of India to hold the securities on behalf of the holder. The SGL holdings can be transferred by issuing a SGL transfer form • Recently Treasury Bills are also being issued frequently under the Market Stabilization Scheme (MSS). Type of Treasury Bills: At present, RBI issues T-Bills for three different maturities: 91 days, 182 days and 364 days. The 91 day T-Bills are issued on weekly auction basis while 182 day T-Bill auction is held on Wednesday preceding non-reporting Friday and 364 day T-Bill auction on Wednesday preceding the reporting Friday Advantages of investing in Treasury Bills: • No Tax Deducted at Source (TDS) SBI DFHI Ltd, is an active player in the both the primary and the secondary market for Treasury Bills with an impressive turnover of Rs.5428 crores. |
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