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

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Submitted by examrobotsa on

Q: 41 (IAS/2018)
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?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,101,69,12,33,101,24

keywords: 

{'treasury bills': [0, 0, 0, 1], 'state government securities': [0, 0, 0, 1], 'india securities': [0, 0, 0, 1], 'reserve bank': [1, 0, 3, 4], 'discount': [0, 0, 1, 1], 'par value': [0, 0, 0, 1], 'services government': [0, 0, 0, 1], 'state governments': [3, 4, 3, 22], 'government': [5, 0, 0, 1]}

This question revolves around the functions of the Reserve Bank of India and the issuance of treasury bills. Here`s a breakdown of what each statement means and its correctness:

1. This statement is false. The Reserve Bank of India (RBI) does manage and service Government of India Securities but it also manages State Government Securities. So, the claim that it does not do so for any State Government Securities is incorrect.

2. This statement is true. Treasury bills, which are short-term debt instruments, are indeed issued by the Central Government of India. State governments do not issue treasury bills.

3. This statement is also true. Treasury bills are generally sold at a price less than their face value (at a discount) and repaid at their face value at maturity. The difference between the purchase price and the face value is the investor`s return.

So, out of the given options, option 3 which combines the second and third statements is the correct one, aligning with the provided answer.