gs1medium

Consider the following statements:

  1. 1.The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.
  2. 2.Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
  3. 3.Treasury bills are issued at a discount from the par value.

Which of the statements given above is/are correct?

  1. A.1 and 2 only
  2. B.3 only
  3. C.2 and 3 only
  4. D.1, 2 and 3
▶ Answer & Explanation

Correct answer: C. 2 and 3 only

RBI manages and services both Central and State Government Securities. Treasury Bills (T-bills) are short-term debt instruments issued by the Central Government to manage its short-term liquidity needs. State governments do not issue T-bills; they typically borrow through bonds or Ways and Means Advances. T-bills are traditionally sold at a discount to their face value, with the difference representing the interest earned by the holder upon maturity.

Source: UPSC gs1 2018

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