Clearing and settlement - t- bills, Financial Management

Clearing and Settlement

The Treasury Bills are available in physical form if an investor desires so. The market is mostly dominated by institutional players who have a facility to hold the T-bills in scripless form. For this purpose, the investor opens an SGL Account (Subsidiary General Ledger) with RBI who credits the accounts with T-bills subscribed. When a transaction of sale is undertaken between two institutional players, the seller issues an SGL (Subsidiary General Ledger) transfer form specifying the details of the transaction. The SGL transfer form is then lodged by the buyer with the Public Accounts Department of RBI to credit its account by debiting the value of the securities to the seller's account. Usually, interbank trades are settled on the same business day, whereas trades with non-bank counterparties are settled either on the same day or one business day after trade date.

Commercial Papers, Certificates of Deposits, short-term debentures and inter-corporate deposits are alternatives to T-bills. In spite of the low returns, T-bills constitute a viable investment opportunity for cash rich PSUs and corporates due to their liquidity, eligibility for SLR, nominal risk weightage. The scope for capital erosion is almost insignificant. Hence, it is essential to develop treasury bill market as it would provide appropriate ancillary facilities to foster the development of money market instruments.

Posted Date: 9/11/2012 4:11:09 AM | Location : United States







Related Discussions:- Clearing and settlement - t- bills, Assignment Help, Ask Question on Clearing and settlement - t- bills, Get Answer, Expert's Help, Clearing and settlement - t- bills Discussions

Write discussion on Clearing and settlement - t- bills
Your posts are moderated
Related Questions
Q. Explain what is Comprehensive Income? Comprehensive Income - Change in EQUITY of a business enterprise during a period from transactions and other circumstances and events f

State the Disadvantages of ias 14 risk and return approach Segments may include operations with different risk and returns. Difficulty in defining segments, which mak

LEAMINGER PLC (a) Purchase outright (2) Balancing allowance Tax effect = 93,906 × 30% = 28,172 Finance lease Annuity Factor (AF) at 10% for 4 year

make an cash conversion cycle of cabbages

discuss the applicability of operation cycle in avegetable growing business

Empirical Measurement of Liquidity: The number of days a particular share is being traded reflects the liquidity of the market. If it is traded actively on 50% of the days when th

The following treasury issues can be included for the construction of the curve: On-the-run treasury issues. On-the-run treasury issues and sele

Big Joe's is changing a piece of equipment.  The equipment will cost $5,000 and has a 5 year life.  The equipment can be leased for annual payment of $1,295 paid at the starting of

How would you describe the fact that China emerged as the second most significant recipient of FDI after the United States in recent years? Answer: China attracted a large deal o

LP Problem, Financial Management Max Z = 107x1+x2+2x3 Subject to 14x1+x2-6x3+3x4=7 16x1+x2-6x3 3x1-x2-x3 x1,x2,x3,x4 >=0