Auction of 91-Day, 182-Day and 364-Day Treasury Bills
Distilled Policy Brief
- The Reserve Bank of India conducts auctions for short-term debt instruments of the Government of India, specifically 91-day, 182-day, and 364-day Treasury Bills to manage short-term liquidity and government borrowing.
- Retail investors can participate in these auctions on a non-competitive basis through the RBI Retail Direct portal, with their allocation capped at a maximum of 5 percent of the notified amount.
- The auctions are executed electronically on RBI's Core Banking Solution, known as the E-Kuber system, using a price-based, multiple-price auction method.
🎯 Prelims High-Yield Examination Points
Treasury Bills are issued only by the Central Government of India (not State Governments) at a discount to face value, with tenors of 91, 182, and 364 days.
⚖️ Mains Analytical & Syllabus Linkages
The democratization of government securities through the Retail Direct Scheme and non-competitive bidding deepens the domestic financial market and diversifies the government's borrowing base.
🎯 UPSC Prelims Practice Drill
With reference to the auction of Government of India Treasury Bills conducted by the Reserve Bank of India (RBI), consider the following statements: 1. Allocation for retail individual investors participating on a non-competitive basis is capped at a maximum of 5 percent of the notified amount. 2. Non-competitive allocation for State Governments and Union Territories with legislature is included within the notified amount. 3. The auction is conducted using a price-based, multiple-price auction method on the E-Kuber system. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statements 1 and 3 are correct: Retail investors participating on a non-competitive basis have their allocation capped at 5 percent of the notified amount, and the auction operates as a price-based, multiple-price auction on RBI's E-Kuber portal. Statement 2 is incorrect because non-competitive participation by State Governments and Union Territories is allocated outside the notified amount.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.