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Question:

An investor wanted to invest Rs.20,000 in Treasury Bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose, he came to know that it was not possible. Identify the reason why the investor could not invest in the Treasury Bill.

Solution:

A Treasury bill is an instrument of short-term debt, issued by the RBI on behalf of the Central Government to meet its short-term requirement of funds. The treasury bill is available at a minimum amount of Rs 25000. This minimum criteria of a Treasury Bill is not fulfilled by the investor and therefore, he could not invest in the Treasury Bills.