Consider the following statements:
- 1.The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.
- 2.Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
- 3.Treasury bills offer are issued at a discount from the par value.
Which of the statements given above is/are correct?
Answer & explanation
Answer: (c) 2 and 3 only
Statements 2 and 3 are correct. Only the Central Government issues treasury bills, and they are issued at a discount to face (par) value and redeemed at par. Statement 1 is wrong because the RBI also manages the public debt of State Governments.
- ✗ 1. Under the RBI Act, the RBI can manage a State's public debt by agreement, and it has done so with State Governments for their State Development Loans (SDLs).
- ✓ 2. The Central Government issues both treasury bills and dated securities, while State Governments issue only dated securities (SDLs), so there are no State treasury bills.
- ✓ 3. T-bills are zero-coupon securities that pay no interest. They are sold below face value and redeemed at face value on maturity, and the difference is the investor's return.
Remember · T-bills: issued only by the Centre, at a discount, redeemed at par (91, 182 and 364 days). States issue only SDLs, which the RBI also manages.
Sources
- Reserve Bank of India: FAQs on Government Securities ↗ “the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). … Treasury bills are zero coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity. … the RBI may, by agreement with any State Government undertake the management of the public debt of that State.”
Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·