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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. Which of the statements given above is/are correct ?
Explanation
The correct answer is (c) 2 and 3 only.
Statement 1 is incorrect: The RBI manages and services both Government of India securities AND State Government securities. It acts as the banker to both the Central and State Governments.
Statement 2 is correct: Treasury bills (T-bills) are short-term debt instruments issued only by the Government of India. State Governments do not issue treasury bills; they issue State Development Loans (SDLs) instead.
Statement 3 is correct: Treasury bills are issued at a discount from par (face) value and redeemed at par. The difference between the issue price and par value represents the interest earned by the investor.
PROVENANCE & STUDY PATTERN
Guest previewStandard question on RBI functions and government securities. Covered in Indian Economy by Ramesh Singh and standard NCERT economics. The distinction between T-bills and SDLs is a key concept tested frequently in UPSC.
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