BANKING AFFAIRS

Detailed explanation-1: -T-bills are issued at a discount and are redeemed at par. While 14-day and 91-day T-bills are auctioned every week on Fridays, 182-day and 364-day T-bills are auctioned every alternate week on Wednesdays. The Reserve Bank of India issues a calendar of T-bill auctions.

Detailed explanation-2: -The Treasury Department sells T-Bills during auctions using a competitive and non-competitive bidding process. Noncompetitive bids-also known as non-competitive tenders-have a price based on the average of all the competitive bids received. T-Bills tend to have a high tangible net worth.

Detailed explanation-3: -Each Treasury Bill, Note, Bond, TIPS, or FRNs is sold at a Treasury auction. In these auctions, all successful bidders are awarded securities at the same price, which is the price based on the highest rate, yield or discount margin of the competitive bids awarded.

Detailed explanation-4: -Banks, financial institutions, and other investors frequently use T-bills to lodge their money in a quick, low-risk investment. The return to the investor is represented by the difference between the purchase cost and the current price of T-bills, which are issued at a discount to their nominal value.

Detailed explanation-5: -National Stock Exchange of India Ltd (NSE), India’s leading stock exchange started trading in T-bills (Treasury Bills) and SDLs (State Development Loans) in its Capital Market Segment. In line with equity trading, investors can now buy and sell T-bills and SDLs through NSE Trading Members.