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Showing posts from February, 2023

What are State Development Loans (SDLs)?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs Long-term Central Government State Development Loans (SDLs) Long-term State Governments What are State Development Loans (SDLs)? State Governments also raise loans from the market which are called State Development Loans (SDLs). What are the features of SDLs? SDLs are dated (long-term) securities issued by State Government.  Interest on SDLs is serviced at half-yearly intervals and the principal is repaid on the maturit...

What are Dated Government Securities?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs Long-term Central Government State Development Loans (SDLs) Long-term State Governments What are dated G-Secs? Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-yearly basis.  What are the features of dated G-Secs? The tenor of dated G-Secs ranges from 5 years to 40 years. Dated G-Secs carry a fixed or floating coupon. Interest on dated G-Secs is ...

Financial Literacy Week (FLW) 2023

Reserve Bank of India (RBI) is observing financial literacy week from February 13 to 17, 2023. Financial Literacy and Financial Education Organization for Economic Co-operation & Development (OECD) defines ‘financial literacy’ as a combination of financial awareness, knowledge, skills, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.  OECD defines ‘financial education’ as the process by which financial consumers / investors improve their understanding of financial products, concepts and risks and through information, instruction and / or objective advice, develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help and to take other effective actions to improve their financial well-being. Financial Literacy Week (FLW) Reserve Bank of India (RBI) has been conducting Financial Literacy Week (FLW) every year since 2016 to ...

What are Cash Management Bills (CMBs)?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs Long-term Central Government State Development Loans (SDLs) Long-term State Governments What are Cash Management Bills (CMBs)? In 2010, Government of India, in consultation with Reserve Bank of India (RBI) introduced a new short-term instrument, known as Cash Management Bills (CMBs), to meet the temporary mismatches in the cash flow of the Government of India.  What are the features of CMBs? CMBs have the generic charac...

RBI’s Monetary Policy (February 08, 2023): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on February 08, 2023. Here are some of the highlights of the monetary policy announcement. Rates and reserves   Change Revised rate Policy repo rate Increase by 25 basis points 6.50% Standing deposit facility (SDF) rate 6.25% Marginal standing facility (MSF) rate 6.75% Bank rate 6.75% Monetary policy stance Withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. Economy    GDP growth projection CPI inflation projection FY 2023-24 6.4% 5.3% Q1 of FY 2023-24 7.8% 5.0% Q2 of FY 2023-24 6.2% 5.4% Q3 of FY 2023-24 6.0% 5.4% Q4 of FY 2023-24 5.8% 5.6% Other...

What are Treasury Bills (T-bills)?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs Long-term Central Government State Development Loans (SDLs) Long-term State Governments What are Treasury Bills (T-bills)? Debt obligations of the Government that have maturities of one year or less are normally called Treasury Bills or T-Bills. What are the features of T-bills? T-bill...

What are Government Securities (G-Secs)?

Governments raise / borrow funds by issuing government securities to finance a variety of projects and activities. What is Government Security (G-Sec)? Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.  G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. What are the tenures of G-Secs? G-Secs can be short-term securities (with original maturities of less than 1 year) or long-term securities (with original maturity of 1 year or more).  In India, the Central Government issues both short-term and long-term securities while the State Governments issue only long-term securities. What are the types of G-Secs? Government security Term Issued by Treasury Bills (T-bills) Short-term Central Government Cash Management Bills (CMBs) Short-term Central Government Bonds or Dated G-Secs ...

Tax slabs for individuals for AY 2023-24 and 2024-25

The Union Budget is announced by the Government of India in the month of February every year. Apart from providing report of incomes and expenditures of the Government, announcing future projects and allocating funds to various sectors, the budget statement also talks about the changes in tax laws. Here, we will see the income tax rates applicable to individuals for the assessment years 2023-24 and 2024-25, under both old and new tax regime.  Previous Year and Assessment Year Previous Year (PY) is the financial year in which the income is earned. Assessment Year (AY) is the financial year in which the income tax return is filed for the income earned in the previous year. Old and New Tax regime The new tax regime was introduced by the Finance Act, 2020 as an alternative tax structure. The new regime offered lower income tax rates and more tax slabs, but without the option to avail any tax exemptions and deduction available under the earlier tax structure. The old regime was made the...