Auction of 91-Day, 182-Day and 364-Day Treasury Bills
Distilled Policy Brief
- Non-competitive bidding in T-Bill auctions is open to State Governments, Union Territories with legislature, eligible Provident Funds, designated Foreign Central Banks, and retail investors.
- Retail investors can submit non-competitive bids via the RBI Retail Direct portal, with retail allocations restricted to a maximum of 5 percent of the notified amount using a price-based multiple price auction method.
🎯 Prelims High-Yield Examination Points
Treasury Bills (T-Bills) are short-term zero-coupon sovereign debt instruments issued exclusively by the Central Government in 91-day, 182-day, and 364-day tenors through RBI auctions.
⚖️ Mains Analytical & Syllabus Linkages
Expanding non-competitive bidding avenues and retail participation through platforms like RBI Retail Direct aids in deepening domestic capital markets and democratizing sovereign debt ownership.
🎯 UPSC Prelims Practice Drill
With reference to the auction of Treasury Bills (T-Bills) conducted by the Reserve Bank of India (RBI), consider the following statements: 1. Non-competitive allocations for State Governments and designated Foreign Central Banks are made outside the notified amount. 2. Non-competitive allocations for retail individual investors are restricted to a maximum of 5 percent of the notified amount. 3. The auction for Treasury Bills is conducted on a price-based format using a uniform-price method. 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 2 are correct. Allocations for State Governments, UTs with legislature, eligible Provident Funds, and Foreign Central Banks under non-competitive bidding are made outside the notified amount, whereas retail individual allocation is capped at a maximum of 5% of the notified amount. Statement 3 is incorrect because the auction uses a price-based multiple price method, not a uniform-price method.
🏛️ 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.