Q. Consider the following statements regarding Cash Management Bills (CMBs):

1. Cash Management Bills are short-term money market instruments with maturity less than 91 days.
2. Cash Management Bills are issued at a discount to face value and redeemed at face value upon maturity.
3. Cash Management Bills are issued by the Reserve Bank of India on behalf of the Central Government.
4. Cash Management Bills follow a fixed, pre-determined issuance schedule like Treasury Bills.

Which of the above statements is / are correct?
Answer: Only 1, 2, and 3 are correct
Notes: Statements 1, 2, and 3 are correct. Cash Management Bills (CMBs) are short-term securities with maturities less than 91 days, issued at a discount and redeemed at face value, by the RBI on behalf of the Central Government. Statement 4 is incorrect; unlike Treasury Bills, CMBs are issued as per requirement, not on a fixed schedule, enabling flexible management of government cash flows.