Which of the following is / are correct statements with respect to the Treasury Bills?

  1. Treasury bills are capital market instruments issued by Central Government in India to balance the long term financial needs
  2. State governments in India do not issue treasury bills

Select the correct option from the codes given below:

Answer: [B] Only 2

First statement is not correct. Treasury Bills are money market instruments issued by central government to balance short term financial needs. Treasury bills are short term money market instruments, which are in circulation for 91 days, 182 days or maximum 364 days. Treasury bills are auctioned by RBI on weekly basis. Treasury bills are issued at discount rate and redeemed at par. Treasury bills are issued in multiples of Rs 25000.

This question is a part of GKToday's Integrated IAS General Studies Module