RBI Securities Management
Question
Consider the following statements:
- 1.
The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.
- 2.
Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
- 3.
Treasury bills offer are issued at a discount from the par value.
Options
1 and 2 only
3 only
2 and 3 only
1, 2 and 3
Explanation
Statement 1 is incorrect: The RBI manages and services both Government of India Securities AND State Government Securities. The RBI acts as banker and debt manager for States as well. Statement 2 is correct: Treasury bills are short-term instruments issued only by the Government of India, not by State Governments. States issue State Development Loans (SDLs) instead. Statement 3 is correct: Treasury bills are issued at a discount to par value and redeemed at par, which is their defining characteristic as zero-coupon instruments. Only statements 2 and 3 are accurate. > Treasury Management: RBI manages both Central and State securities; Only GoI issues T-bills; T-bills issued at discount.
Question details
Year
2018
Paper
GS Paper 1
Question
Q56
Subject
Economy
Sub-topic
Financial Markets - Government Securities
Type
Statement-based
Difficulty
Medium
Nature
Static
Source hint
RBI Guidelines and Constitutional Provisions
See all questions on Financial Markets - Government Securities
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