Main Forms of Government Securities in English.....

What are the main forms of Government securities features of Treasury Bill.

Contents

Main Forms of Government Securities

(a) Forms in which Government Securities are held:

These are as under:

Stock or book debt
Bearer bonds
Promissory notes.

(b) Instruments through which the Government Borrowed:

These are as under :

Zero Coupon bonds;
Capital indexed bonds;
Partly paid bonds;
Auction stocks;
Top Stock;
Flexi-bonds etc.

Promissory Notes

In the promissory note, the Government promises to pay a specified mount at a specified date to pay interest at the office of RBI. Promissory note as negotiable instrument. It is payable to the order of a specified person. It is transferable by endorsement. Promissory notes are more secure. It stands between stock certificates and bearer bonds.

Bearer Bonds

It certifies that bearer has a right to receive sum specified in rupees on the ate indicated in accordance with the terms of a particular loan. Printed coupons re attached to the bond. The interest is payable to the holder of coupon. Bond is discharged on the due date. It is more easy to transfer.

Features of Treasury Bill

Following are the features of treasury bill:

1. Treasury bill is a financial instrument. It is like a promissory note.

2. Treasury bill is issued by the central bank on behalf of the government.

3. It is issued at low price than its nominal value and it is repaid on nominal value on maturity.

4. It is highly liquid. They are sold through auction.

5. It is like a promissory note and government promises to pay the specified amount.

6. Reserve Bank of India State Bank of India, other institutions, state governments and development banks are the participants of treasury bill market.

7. There are two types of treasury bills in India. These are ad hoc treasury bills and regular treasury bills.

8. The rate at which Central Bank sells treasury bill, is called as treasury bill rate.

9. In our country treasury bills are main source of monetisation of government loan.