364-day t-bills, Financial Management

Assignment Help:

364-Day T-Bills

The Government considered that it is important to develop government securities market for monetary control. It also had an intention to ensure that government's credit needs are met more and more directly from the market instead of pre-emption of deposit resources. With this view, treasury bill was developed as a monetary instrument with market related rates. As a part of the overall development of Government securities market, the Government of India proposes to float treasury bills of varying maturities up to 364 days on auction basis.

The Government, with an intention to stabilize the money market in the country, introduced the 364-day T-bills on 28th April, 1992. The RBI neither discounted these bills nor participated in the auction. 364-day T-Bills are auctioned fortnightly, but the amount, however, is not notified in advance. These T-bills have become popular due to their higher yield coupled with liquidity and safety. The yield on 364-day T-bills is used as a benchmark by the financial institutions such as IDBI, ICICI, etc., for determining the rate of interest on floating bonds/notes. These bills widened the scope of money market and provided an innovative outlet for surplus funds. The introduction on treasury bills of varying maturities would offer investors a wider choice for investing in different instruments and thereby foster the development of Government securities market.

 


Related Discussions:- 364-day t-bills

Difference euronote market and euro medium term note market, What is the di...

What is the difference between the Euronote market, the Euro-medium-term-note market, and the Eurocommercial paper market? Answer:  Euronotes are short-term notes guarantees by

Analysis of the capacity to pay, In addition to management quality, a...

In addition to management quality, an assessment of the financial capacity of a company should also include an evaluation of trends, regulatory environment, basic

Electronic communications networks, Electronic Communications Networks: ...

Electronic Communications Networks: In traditional stock exchanges, the buying and selling of stocks take place at a physical location only and the members have to conduct tradi

What can financial institution often do for deficit econmic, What can a fin...

What can a financial institution often do for a deficit economic unit (DEU) that it would have difficulty doing for itself if the DEU were to deal directly with an SEU? SEUs us

Define trustworthy collateral from the lenders perspective, What is trustwo...

What is trustworthy collateral from the lenders' perspective?  Explain whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable

Define the main objectives of the bretton woods system, What were the main ...

What were the main objectives of the Bretton Woods system? Answer: The major objectives of the Bretton Woods system are to acquire exchange rate stability and promote internation

Need for assessing the risks , Define risk. Examine the need for assessing ...

Define risk. Examine the need for assessing the risks in a project

Define market value in modigliani miller equation, Define in the Modigliani...

Define in the Modigliani-Miller equation (MM equation), why is the market value of the levered firm greater as compared to the market value of an equivalent unlevered firm? Th

Compute full cost-financially-based rationale , Bill Nicholson wants you to...

Bill Nicholson wants you to help him prepare the financial case for moving the manufacturing operation to Andover.   He has specifically expressed interest in getting answers to th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd