Treasury Bills

Meaning:

Treasury bill are the instruments of short-term borrowing by the central government or by a state government. They are promissory notes issued at a discount for a fixed period.

Objectives of Issuing Treasury Bills:

1. To raise funds for the government for meeting its expenditure thermals
2. To provide outlet for investment of temporary surplus funds by investors.

Other Features of Treasury Bill:

1. They are highly liquid
2. They are safe investments
3. They give attractive yield
4. They are approved assets for SLR purposes in the case of bank.