It is a discounted instrument issued by the Central Government.
The main features of Treasury Bills are:
Sovereign zero risk instruments.
Treasury Bills: Short term, discounted Instruments with a maximum tenor of 364 days.
Available in primary and secondary market.
Issued at a discount to face value i.e., investors will buy the T-bill at discount to face value of Rs.100 and on maturity the face value of Rs.100 is received by the investor.
No Tax Deduction at Source (TDS)
Convenience of CSGL a/c as in case of Central Govt. securities such as automatic credit of redemption money.
It represents short term unsecured promissory notes issued by top rated corporates, primary dealers(PDs),satellite dealers(SDs) and the all-India financial institutions(FIs).
The main features of these papers are:
Corporates having tangible net worth of not less than Rs.4 crore and whose borrowal account is classified as Standard Asset by the financing bank/s, are eligible to issue CPs
All CPs require credit rating from a credit rating agency. Highest rating is P1+ and lowest is P-2 by CRISIL.
CP can be issued for a minimum period of 15 days and a maximum up to one year.
Minimum amount invested by single investor is Rs.five lacs or multiple thereof.
CPs are issued at a discount to face value.
Issued in demat form. (Compulsory demat from July '01).
