Q. Consider the following statements regarding Government Securities (G-secs)
1. It is a tradable instrument issued by the Central Government or the State Governments.
2. State Governments can issue both, treasury bills and bonds or dated securities.
Which of the above statements is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A
Notes:

Recently, The Reserve Bank of India(RBI) has announced the launch of the RBI Retail Direct scheme.

About RBI Retail Direct Scheme:  

  • RBI Retail Direct Scheme is a one-stop solution to facilitate investment in government securities (G-secs) by individual investors.  
  • Under the scheme, retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with the RBI. 

About G-Sec: 

  • A Government Security(G-Sec) is a tradable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation.   
  • Such securities are short-term (usually called treasury bills, with original maturities of less than one year) or long-term (usually called Government bonds or dated securities with an original maturity of one year or more).   
  • In India, the Central Government issues both, treasury bills and bonds or dated securities. While the State Governments issue only bonds or dated securities which are called the State Development Loans (SDLs). 

Read more: G-secs: RBI unveils Retail Direct Scheme