Auction of 91-Day, 182-Day and 364-Day Treasury Bills
Distilled Policy Brief
- The Reserve Bank of India announced auctions for 91-day, 182-day, and 364-day Government of India Treasury Bills utilizing a price-based auction under the multiple price method.
- Eligible entities such as State Governments, Union Territories, Provident Funds, and retail investors can participate on a non-competitive basis, with retail investor allocations capped at 5 percent of the notified amount.
- Bids are submitted electronically via the RBI's E-Kuber core banking system, while individual retail investors can use the dedicated Retail Direct portal.
🎯 Prelims High-Yield Examination Points
Treasury Bills are issued in tenors of 91 days, 182 days, and 364 days. Retail investors can participate on a non-competitive basis up to a maximum of 5 percent of the notified amount through the Retail Direct portal.
⚖️ Mains Analytical & Syllabus Linkages
Treasury bills serve as vital short-term instruments for managing government cash flow mismatches and monetary policy transmission, acting as risk-free benchmarks in the domestic money market.
🎯 UPSC Prelims Practice Drill
With reference to the auction of Government of India Treasury Bills by the Reserve Bank of India, consider the following statements: 1. The auctions are conducted on a price-based method using the multiple price method. 2. Eligible retail investors can participate on a non-competitive basis, with their allocation capped at 5 percent of the notified amount. 3. Bids by participants are mandatorily submitted in physical format to the Public Debt Office under all circumstances. 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. The RBI conducts Treasury Bill auctions using a price-based auction under the multiple price method, and eligible retail investors can participate on a non-competitive basis with allocations capped at 5 percent of the notified amount. Statement 3 is incorrect because bids are submitted electronically via the RBI's E-Kuber system (or the Retail Direct portal for retail investors), and physical bids are accepted only in the event of system failure.
🏛️ 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.