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

Provide three examples of mutually exclusive projects, Provide three exampl...

Provide three examples of mutually exclusive projects. Mutually elite projects are projects that compete against each other for our selection.  If a firm were considering the b

Sinking fund function in retirement of an outstanding bond, How does a sink...

How does a sinking fund function in the retirement of an outstanding bond issue? Where a company puts payments that are then used to buy back outstanding bonds is known as a si

Explain about deferred payment, Q. Explain about Deferred Payment? supp...

Q. Explain about Deferred Payment? suppose a person take a loan of a specified amount at a given rate of the interest. he wants to repay this loan together with the interest in

Profitability ratios, A holder in debt obligation, though does not ha...

A holder in debt obligation, though does not have any opportunity to share in the economic growth of the firm, is interested in a firm's profitability because it

Illustrate modern method of measurements, Q. Illustrate Modern Method of Me...

Q. Illustrate Modern Method of Measurements? Holding Period Yield: The holding period yield is one of the modern techniques on Measuring return. It serves two purposes: a) I

FDD , fimnancial accounting system

fimnancial accounting system

Cash flow yield, In structured products like mortgage-backed and asse...

In structured products like mortgage-backed and assets-backed securities, the cash flows include both principal repayment and interest. The complication arises wh

maximization of a company''s share, a. The primary financial objective of ...

a. The primary financial objective of a company is the maximization of the wealth of shareholders ...per corporate finance theory.    Though, this objective is usually replaced by

What is the importance of investigation of incidents, Q. What is the import...

Q. What is the importance of investigation of incidents? 1. Incident investigation is the process of identifying the underlying causes of incidents and implementing steps to pr

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