Gsec Different Types

Question 1

Goverment securities different types

Answer 1

Short term - treasury bills less than 1 year maturity
Long term - Government bonds or dated securities with more than 1 year

Also called gilt edged instruments

Question 2

Center and state who issues what

Answer 2

Central issues both treasury bills and dated securities

State only bonds also called state development loans

Question 3

T-bills different tenures and what is interest

Answer 3

Money matket instruments

3 tenors

91 day, 182 day, 364 day

Zero coupon securities

Question 4

Cash management bills CMB

When started and what are they ised

Answer 4

2010 started for mismatches in cashflow of the goverment

Same as T-bills but less than 91 days

Question 5

Dated G-Secs tenor and interest

Answer 5

Fixed and floating interest paid on face value

5 to 40 years, with half yearly basis

Question 6

How are securities identified

Answer 6

ISIN - international security identification number

Question 7

Coupons and maturity handled on holidays

Answer 7

Coupons on next working day

Redemption on previous working day

Question 8

Fixed rate bonds

Answer 8

Coupon payment is fixed for entire bond lifecycle

Question 9

Floating rate bonds FRBs

Answer 9

Variable coupon rate reset on pre-announced intervals

Can be decided based average of last 3 auctions of 182 day T-bills

Question 10

FRBs when introduced

Answer 10

Sep 1995

Question 11

Floating Rate Bond based on spread

Answer 11

Based on base rate and fixed spread

Decided by the way of auction

Question 12

Capital indexed bonds what and when

Answer 12

Principal is linked to inflation to protect investors

Introduced 5 year bond in 1997

Question 13

Inflation indexed bonds IIB

Answer 13

Both principal and coupon are protected by inflation

Linked to WPI and CPI

Question 14

IIB India when and what

Answer 14

Govt of India through RBI issued WPI based in June 2013

Issued on last Thursday of every month till Dec 2013

Exclusively for retail investors introduced CPI based in Dec 2013

Question 15

Bonds with call and put options

When and what types

Answer 15

Call option for issuer and put option for investors

Call only or put only or both

India both call and put issued in 2002 for 10 years with option excercise after 5 years

Question 16

Special securities

Answer 16

Food bonds, fertilizer bonds, oil bonds for generally subsidy

Generally higher coupon over dated securities

Not eligible for SLR but can be used as collateral

Bank recapitalization bonds in 2018 which are non transferable and no statutory provisions