Q.What are the general features of a Treasury Bill? (any three)

Treasury Bills are safe, short-term government instruments issued by the RBI at a discount and redeemed at face value.

A Treasury Bill (T-Bill) is an instrument of the money market used by the government to borrow money for a short period. Its general features are:

1. Issuer — issued by the Reserve Bank of India on behalf of the Government of India.
2. Short maturity — normally issued for 91 days, 182 days or 364 days.
3. Issued at a discount — sold below face value and redeemed at full face value; the difference is the investor's return, so no separate interest is paid.
4. High safety — being government-backed, they are free from default risk.
5. High liquidity — they can be easily bought and sold, and are also negotiable. …