Development of the market - t-bills, Financial Management

Assignment Help:

Development of the Market

Until 1950s, T-Bills were issued by both the Central and State Governments and from 1950s, it is only the Central Government that is issuing Treasury bills. Up to 1965, the mode of issue of T-bills to the public were through bi-weekly auctions or tenders. In 1965, the concept of ‘intermediate' T-bills were introduced and were sold for few years. According to this mode, T-bills had a maturity of 91 days and the rates were fixed by the RBI. The day succeeding the day of the usual weekly auction till the day preceding the next auction, was fixed for receiving the tenders for the next auction. The mode of issuing T-bills has changed from 12th July, 1965. Instead of inviting tenders, the T-bills were made available throughout the week at specified rates from time to time. This change in issuance has facilitated an increase in selling of T-bills (as the commercial banks were investing their short-term surpluses in these instruments). As the government raised its finances by issuing ad hoc T-bills to RBI, which is technically a short-term source, but, in practice, it is long-term in nature. In the sense, the ad hoc treasury bills are notionally discharged and renewed on maturity. Therefore, finance raised by the government in this form is technically short-term finance, but in reality ends as a long-term finance.

 


Related Discussions:- Development of the market - t-bills

What is the required rate of return on the project, The risk free rate is 1...

The risk free rate is 10 percent and the expected return on the market portfolio is 14 percent. A firm considers a project that is expected to have a beta of 1.3, whereas the beta

Mortgages, A mortgage may be defined as a pledge of property ...

A mortgage may be defined as a pledge of property to secure a debt payment; in this context, we will use the term property to mean real estate. If the

Day count convention, Day count convention is a system used to determ...

Day count convention is a system used to determine the number of days between two coupon dates. It is important in calculating accrued interest and present value

Approaches, Briefly discuss the three approaches to the short-term financin...

Briefly discuss the three approaches to the short-term financing problem and provide relevant examples of each?

The japanese pension fund system, The Japanese Pension Fund System The J...

The Japanese Pension Fund System The Japanese pension system is a multi-pillar system. Public and private pension schemes are the two important pillars. The first tier is the Ba

Define pro forma financial statements and cash budget, What is the differen...

What is the difference among pro forma financial statements and a cash budget?  Explain why pro forma financial statements are not employed to forecast cash needs. Pro forma inco

Inventory management, A computer products store stocks color graphics monit...

A computer products store stocks color graphics monitors, and the daily demand is normally distributed with a mean of 1.6 monitors and a standard deviation of 0.4 monitor. The lead

What are the financial management problems, What are the financial manageme...

What are the financial management problems Traditional approach was challenged was that the treatment was built too closely around episodic events, like incorporation, promotio

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

Which formula would you use to solve for the payment, Which formula would y...

Which formula would you use to solve for the payment required for a car loan if you know the interest rate, length of the loan, and the borrowed amount?  Explain. To answer for

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