182-day t-bills, Financial Management

182-Day T-Bills

Following the Sukhamoy Chakravarty Committee recommendations, in November, 1986, 182-day T-bills were introduced in order to develop the short-term money market and also to provide an additional avenue for the Government to raise financial resources for its budgetary expenditure. Initially, these were the first type of treasury bills to be auctioned on monthly basis without any rediscounting from the RBI. Thus, the first step of market oriented discount rate has come into existence. The state governments and provident funds were not allowed to participate in these auctions. To impart an element of flexibility, the Central Bank was not announcing the amount in advance. The market participants were allowed to bid the amount and price of their choice. The authorities would determine the cut-off discount rate and the amount of T-bills sold in an auction. They were issued with a minimum lot size of Rs.1 lakh and multiples thereof. These auctions were monthly in the beginning but later in 1988, they were made fortnightly. These bills were eligible securities for Statutory Liquidity Ratio purpose and for borrowing under standby refinance facility of the RBI. The 182-day T-bills had an interest rate that was relatively market determined and this made it possible for the development of a secondary market for it. Nevertheless, till 1987, 182-day T-bills market could not emerge as an integral part of the money market. These bills were discontinued and in place of which 364-day T-bills emerged.

In April, 1998, these bills were reintroduced in order to obtain a continuous yield curve for a period of one year. These bills were again discontinued from May, 2001 up to March, 2005. These bills were reintroduced with effect from April, 2005.

 

Posted Date: 9/11/2012 4:08:33 AM | Location : United States







Related Discussions:- 182-day t-bills, Assignment Help, Ask Question on 182-day t-bills, Get Answer, Expert's Help, 182-day t-bills Discussions

Write discussion on 182-day t-bills
Your posts are moderated
Related Questions
Step 1) Opportunity Set Graph:Combine 2 of your stocks (Ignore the other 2 stocksfor this step only).  Construct an investment opportunity set (the curved set) between the two risk

You are required to choose a company for analysis.  This company should be quoted on one of the principal international exchanges.  It may be your own company.  You should then do

What is the time value of money? The meaning of time value of money is that money you hold in your hand today is worth much more than money you suppose to receive in the future

IMPORTANT FACTORS FOR  SUCCESSFUL BUDGETARY CONTROL 1. Clearly defined organization structure. 2. Top management support. 3. Reporting of deviations 4. Efficient acco

How do we calculate the payback period for a proposed capital budgeting project?  What are the main criticisms of the payback method? We calculate the reimbursement period for

The values shown in ordinary annuity tables (either present value or compound value) can be adjusted to the annuity due form by ____ the ordinary annuity interest factor by ____. (

In the case of dual currency bonds, the interest is paid in one currency, while the principal repayment is made in another currency. Deep Di

Question: You have just been appointed the secretary of the ALM Committee (ALCO) of ABN Bank. The ALCO members have some queries relating to the liquidity risk faced by the ban

stauffer , inc., has estimated sale and purchase requirments for the last half of coming year. parepare cash budget for the month of

Deferred coupon bonds are generally issued at a discount price and are used for financing leveraged buyouts. The coupon payment on these types o