Government Securities

The Reserve Bank of India (RBI) plans a large buyback of Government Securities worth Rs 40,000 crore.

About Government Securities:

• They are tradeable instruments issued by the central government or state governments.
• They acknowledge the government’s debt obligation.
• Include short-term instruments, usually referred to as Treasury bills (T-bills) with maturities of less than one year, and long-term instruments referred to as bonds, with maturities of more than one year.
• The government borrows money through G-Secs to meet its fiscal expenditures, similar to how banks use deposits to fund loans.
• RBI issues T-bills and Bonds on behalf of the Government to raise funds by offering a fixed return.
• Carry practically no risk of default and offer a fixed return, making them a secure investment option.

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