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 are issued at a discount from the par value.Which of the statements given above is/are correct?
✓ Correct answer: c) 2 and 3 only
ExplanationStatement 1 is incorrect : The Reserve Bank of In- dia (RBI) manages and services both Government of India (Central Government) securities and State Government se- curities.These are called State Development Loans (SDLs).RBI acts as the debt manager for both the Government of India (GoI) and State Governments.Statement 2 is correct : In India only the Central Government issues Treasury Bills (T-bills).State Governments do not is- sue T-bills.They raise funds through bonds known as State De- velopment Loans (SDLs).Statement 3 is correct : Treasury Bills (T-Bills) are issued at a discount to their face value (par value) and redeemed at face value upon maturity.The difference between the issue price and the face value represents the interest earned by the in- vestor.For example a T-Bill with a face value of ₹100 might be issued at ₹98 and the investor earns ₹2 as interest.170
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